UBS - Thur (1)

ab
Global Equity Research
UBS Investment Research
Australasia
The Australasian Daily

TODAY'S HIGHLIGHTS Australasian Daily Summary, Financial Reporting Season Events Calendar - Upcoming Company Information ECONOMICS, STRATEGY & QUANTITATIVE Market Comment Australian Monthly Market Wrap - January 2012 Quantitative Australian Quantitative Strategy - What to look for during reporting season INDUSTRIALS Boral, BLD.AX Sells Indonesian concrete 12-month rating: Buy (Unchanged), FY12E A$0.232=>A$0.223, FY13E A$0.299=>A$0.285, PT A$5.03/US$21.42, Market cap. A$2.95bn/US$3.26bn Ansell Limited, ANN.AX No COGS relief for ANN in FY12 12-month rating: Sell (Unchanged), FY12E US$0.84, FY13E US$0.93, PT A$11.64/US$12.39, Market cap. A$1.96bn/US$2.08bn Goodman Fielder, GFF.AX Results preview 12-month rating: Neutral (Unchanged), FY12E A$0.07, FY13E A$0.08, PT Prior: A$0.57/US$0.61 => A$0.55/US$0.59, Market cap. A$1.03bn/US$1.09bn RESOURCES Woodside Petroleum, WPL.AX Woodside Catalysts 12-month rating: Buy (Unchanged), FY11E US$2.05, FY12E US$2.31, PT A$38.35/US$40.83, Market cap. A$27.6bn/US$29.3bn Caltex Australia, CTX.AX Refiner margin update (Dec 2011) 12-month rating: Neutral * (Unchanged) CBE , FY11E A$0.97, FY12E A$1.06, PT A$12.42/US$13.22, Market cap. A$3.44bn/US$3.66bn Energy Resources Aus, ERA.AX Production hinges on the weather 12-month rating: Prior: Neutral => Sell, FY11E A$(0.20)=>A$(0.17), FY12E A$(0.22)=>A$(0.25), PT Prior: A$1.30/US$1.38 => A$1.15/US$1.22, Market cap. A$0.43bn/US$0.46bn Glyn Lawcock p.69 Gordon Ramsay p.65 Gordon Ramsay p.60 Lindy Newton, CFA p.47 Andrew Goodsall p.40 David Leitch p.35 Paul Winter p.16 David Cassidy p.10 Lisa Hacking p.7
Thursday, 02 February 2012

http://www.ubs.com/investmentresearch
UBS This package has been prepared by UBS Securities Australia Ltd ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN AT THE END OF THE NOTES *Under review (UR) and/or exception to core rating bands (CBE) - see page : 95 UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
The Australasian Daily Thursday, 02 February 2012
Tap Oil Ltd, TAP.AX Dec Qtr: Tallaganda drilling in Feb
Gordon Ramsay
p.77
12-month rating: Buy (Unchanged), FY11E A$0.04=>A$0.01 , PT A$1.18/US$1.26, Market cap. A$0.19bn/US$0.20bn EARNINGS & VALUATION Summary Data by Sector,
UBS
The Australasian Daily Summary 01 February 2012
Financial
Reporting Season Events Calendar
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Upcoming Company Information

Upcoming company event dates Attached are upcoming event dates.
Lisa Hacking............................. +61-2-9324 3511 Assistant lisa.hacking@ubs.com
Equity Strategy
Australian Monthly Market Wrap
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January 2012
Markets At A Glance Equities rally on falling risk aversion. Cyclicals outperform. Government bond yields little changed. Australian dollar rallies. Commodity prices generally rise. Domestic economic data on the weak side. US employment data improving. European sovereign credit ratings downgraded. Best & Worst Performers The best performing Australian large-cap stocks during the month included Paladin Energy (+34.3%), Lynas Corporation (+26.8%) and Boart Longyear (+26.6%). The worst performers included QBE Insurance Group (-11.5%), Transfield Services (-7.4%) and Seek (-7.2%).
David Cassidy...........................+61-2-9324 3721 Strategist david.cassidy@ubs.com Dean Dusanic.............................+61-2-9324 3785 Strategist dean.dusanic@ubs.com
Quantitative
Australian Quantitative Strategy
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What to look for during reporting season

Two speed reporting season Both the level of earnings growth and earnings revisions point to a two speed reporting season with resource services, general industrials, and healthcare faring better than the consumer related sectors and financials. What to look for Financial statement quality, value and earnings revisions drive outperformance through reporting season. We find that financial statement quality combined with value provides the greatest outperformance in a long-short model, whilst value combined with earnings revisions provides the greatest outperformance on the long side. What else works? In a world of slower growth dividends will matter. With many Australian companies currently carrying excess cash and franking credits on their balance sheets, we believe focussing on companies with fully franked dividends can provide investors with a free kick. Potential surprises Potential upside surprise: Flight Centre, Primary Health Care, Sonic Healthcare, Dexus Property Group, DUET Group, Sigma Pharmaceuticals, AGL Energy, Boart Longyear, Carsales.com. Potential downside surprise: Downer EDI, Ten Network, Seven West Media, Woodside Petroleum, SEEK, Transpacific Industries Group, Aquila Resources. Potential buybacks or special dividend: JB Hi-Fi, Flight Centre, Carsales.com, SMS Management, and Rio Tinto.
Paul Winter................................+61-2-9324 2080 Analyst paul-j.winter@ubs.com Oliver Antrobus, CFA..................+61-3-9242 6467 Analyst oliver.antrobus@ubs.com Vyas Balasubramanian, CFA...... +61-2-9324 2728 Analyst vyas.balasubramanian@ubs.com
Industrial
Boral (BLD.AX / BOALY.PK)
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Sells Indonesian concrete

Sale for US$135m compared to US$14m EBITDA The transaction is in line with the previously announced strategy and represents a multiple of 9.6x historic EBITDA. UBS 2012 EBITDA estimate for this business was lower. The transaction is expected to close prior to June 30 2012. Proceeds will be used to reduce UBSe consolidated net debt ~A$1.5bn. Book profit on the sale is $35m. FY12 interim previewed at $65-$70 This interim will exclude any property earnings and includes an estimated $10m variance on the Galong lime plant which is now closed. Estimates reduced ~4% FY12 and FY13 Our new estimates reflect lower Asian concrete earnings than previously modelled and risk associated with a H2 hockey stick. Valuation price target is unchanged at $5.03 The Indonesian concrete sale increases our confidence in the BLD price target. Although the market PE has moved up from 12.6 to 12.9 this year we leave our price target unchanged.
David Leitch.....................+61-2-9324 3870 Analyst david.leitch@ubs.com Hannah Dent..................... +61-2-9324 2665 Analyst hannah.dent@ubs.com
Price (31 Jan 2012)..... A$4.04/US$17.89 (ADR) 12-month rating...............Buy (Unchanged) 12m price target..............A$5.03/US$21.42 Market cap................ A$2.95bn/US$3.26bn Full-Year EPS 2012E.......................... A$0.232 => A$0.223 2013E.......................... A$0.299 => A$0.285
Healthcare
Ansell Limited (ANN.AX)
No COGS relief for ANN in FY12

FY12 latex price in line with FY11 despite 2H fall. Synthetics still up At current spot rate for balance of ANN FY12 manufacturing period, average latex prices for FY12 will be MYR822 per tonne almost exactly the same as MYR824 per tonne in FY11. However we note that price is already increasing into the wintering period and is likely to push prices higher still before the period closes resulting in very modest cost headwind vs pcp.
Andrew Goodsall.............+61-2-9324 3574 Analyst andrew.goodsall@ubs.com Dan Hurren........................+61-2-9324 3575 Analyst dan.hurren@ubs.com
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Butadiene prices (key component of synthetic rubber products) were up 104% on pcp in 1H and 50% 2H to date. Half year price variation will impact seasonality Despite flat price year on year, half year latex prices have created large cost disparities. 1HFY12 latex price was up 29% on pcp while 2HFY12 price was down 23% on pcp. The 1H headwind and 2H tailwind creates a reverse seasonality in UBSe of 49/51. This will be most evident in medical and new vertical segments. Net impact modest cost headwind captured in guidance but no upside Lower second half latex prices should not be confused as significant upside to the ANN cost base. ANN affirmed guidance at AGM in Oct 11 noting that latex costs has eased since guidance was set in Aug 11 but noted that synthetics costs had offset. The situation has changed little since that time end of period latex price into wintering period may impact vary outcomes marginally either way. We note that a constant rubber price is a positive to ANN with some ability to offset through price increases short term volatility can create cost/price squeezes. Valuation: PT $11.64ps (unchanged) Sell PT uses NAV at market multiple + NPV tax loss at 77cps.
Price (31 Jan 2012)....... A$14.87/US$15.83 12-month rating...............Sell (Unchanged) 12m price target........... A$11.64/US$12.39 Market cap................ A$1.96bn/US$2.08bn Full-Year EPS 2012E............................................. US$0.84 2013E............................................. US$0.93
Consumer, Non-Cyclical
Goodman Fielder (GFF.AX)
Results preview
H112 results 16 February 2012 GFF will report H112 results on Thursday 16 February. No guidance has been given but GFF has been clear that H1 results will be weak. We note the headwind from c14% higher fuel prices. GFF should reiterate $100m cost out by FY15 and improving H212 results from such cost out plus easing COGS (spot wheat, raw milk & palm oil 11-22% lower yoy). Current shelf
Lindy Newton, CFA......... +61-2-9324 2172 Analyst lindy.newton@ubs.com Ben Gilbert........................ +61-2-9324 2782 Analyst ben.gilbert@ubs.com Paul Wong.........................+61-2-9324 3493 Analyst paul-c.wong@ubs.com
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prices suggest GFF should benefit from lower commodities but retailer and competitive environment are key. Corporate restructure GFF is undergoing significant change with 5 of its 7 executive management team in their roles for <7 months. Businesses with combined turnover of >$600m (c23% of group) are under consideration for sale & could deliver proceeds of $400m in our view. Exiting these underperformers is positive for sentiment, balance sheet & maybe even franking credits but we expect EPS dilution (sensitivities within). Maintain Neutral; need evidence of progress We expect new management to take time delivering its restructure, cost out & divestment program. Evidence of progress on each will drive the share price with the sale of Integro in particular a key catalyst we assume proceeds of $240m. Stock appears cheap on 7.7x FY13E PE with 9.4% dividend yield however its 35% PE discount to market is not far off its 6-year average discount of 30%. Valuation Our sum-of-the-parts based price target of $0.55 is trimmed from $0.57 as we roll forward to FY13E earnings.
Price (31 Jan 2012)........... A$0.53/US$0.56 12-month rating......... Neutral (Unchanged) 12m price target..... Prior: A$0.57/US$0.61 => A$0.55/US$0.59 Market cap................ A$1.03bn/US$1.09bn Full-Year EPS 2012E................................................ A$0.07 2013E................................................ A$0.08
Energy
Woodside Petroleum (WPL.AX / WOPEY.PK)
Woodside Catalysts
Share price drivers in 2012 Woodside share price catalysts over 2012 include delivering successful Pluto LNG T-1 start up (a key investment risk), progress with Laverda oil (Norton could add oil reserves that facilitates a stand alone development decision), news on the potential Pluto LNG T-2 expansion (Hess /
Gordon Ramsay.............. +61-3-9242 6631 Analyst gordon.ramsay@ubs.com Cameron Hardie................+61-3-9242 6383 Analyst cameron.hardie@ubs.com
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XOM decision?), potential Browse equity sale / delivery of FID readiness by mid 2013, progress with Sunrise FLNG. Key dates to watch for 22 Feb: 2011 Full Year Result. Late March 2012: Pluto LNG T-1 start up. 1Q 2012: Norton exploration well (Laverda Oil Project). Mid 2012: potential Hess gas supply decision (Pluto LNG expansion). 1H 2013: Browse LNG FID readiness / equity sale. After East Timor election: potential Sunrise FLNG update. Equity drives alignment At both Pluto and Browse we believe whoever provides the gas (Pluto expansion) and / or commits to LNG off take (Pluto / Browse) will also become a new equity partner in the respective LNG project. At Pluto, this may be attractive to Hess, but less so for ExxonMobil (unless they also gain operatorship). Alternatively, from a volume perspective, Scarborough gas must be more attractive to WPL (one large field). We expect a Browse early equity sale only if it facilitates/adds project value. Valuation: $31.06 (DCF at 10%) Our NAV estimate of $31.06 is based on DCF (10% nominal rate) of forecast cash flow over the 2P reserve life of producing assets, and Pluto LNG T-1. Our 12-month price target of $38.35 includes 50% risking for potential Pluto LNG T-2 expansion, Sunrise FLNG and Browse LNG.
Price (31 Jan 2012)..... A$34.21/US$36.36 (ADR) 12-month rating...............Buy (Unchanged) 12m price target........... A$38.35/US$40.83 Market cap................ A$27.6bn/US$29.3bn Full-Year EPS 2011E............................................. US$2.05 2012E............................................. US$2.31
Caltex Australia (CTX.AX)
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Refiner margin update (Dec 2011)

Dec CRM of US$7.92bbl; 2011 average CRM US$7.98/bbl The Caltex Refiner Margin (CRM) realised for Dec averaged $7.92/bbl. This was in line with our expectation (1.4% below pcp), but 42% above the Nov CRM realised. The unlagged Singapore Weighted Average Margin (SWAM) was also US$11.46/bbl (Nov: US$10.54/bbl). Improved gasoline margins The realised CRM benefited from a US$0.75/bbl positive lag (falling Brent price and higher A$). Also, gasoline (petrol) margins improved due to regional rate cuts, but middle distillate (diesel) suffered from the warm northern hemisphere winter. The Brent-Dubai spread is narrowing (this is good) as Libyan production returns. Neutral rating maintained Overall, there is no change to our forecasts as the Dec refiner margin realised by Caltex is in line with our view. We are increasingly taking the view that Caltex may close its refining operations, subject to sourcing efficient and reliable product (mainly gasoline) that meets Australian standards. Valuation: NAV of $10.43, DCF at 10% Our Caltex share price target of $12.42 is based on our NAV estimate (DCF, using a nominal 10% discount rate), plus a risk weighted preliminary value for the Caltex marketing business that reflects a potential exit from refining.
Price (31 Jan 2012)....... A$12.73/US$13.55 12-month rating.......Neutral * (Unchanged) 12m price target........... A$12.42/US$13.22 Market cap................ A$3.44bn/US$3.66bn Full-Year EPS 2011E................................................ A$0.97 2012E................................................ A$1.06 *Exception to core rating bands - see page 9
Basic Materials
Energy Resources Aus (ERA.AX)
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Production hinges on the weather

ERA reports CY11 results inline with expectations. ERA reported an underlying NPAT loss of $54m which was inline with UBSe. ERA is guiding for 2012 production to be in the range of 3-3.7kt, but this is highly dependent on the level of rainfall for the remainder of the 2011/12 wet season. Wet weather poses a risk to mining all of the Ranger pit ore reserves ERA confirmed that the Ranger Pit will cease mining at the end of CY12. There is 3.36Mt of ore remaining in the pit while in the last 7 years ERA have mined more than 3Mtpa in only 2 years. In CY10 & CY11, ERA mined a total of 2.6Mt of ore (1.3Mtpa), indicating the impact wet weather can have on production. Rainfall in the 11/12 wet season has been above average to date, with 2 or so months of the wet season remaining. If ERA cannot mine all of the reserves in CY12, then they will likely be sterilised as the pit is prepared for rehabilitation in CY13. Downgrade to Sell. Weather risk to prevent near term outperformance We believe ERA will continue to trade closer to a conservative No Ranger 3 Deeps value for the next 12 months than the upside potential posed by the development of the project as viability will take time to assess. Our base case valuation with no Ranger 3 Deeps is $0.37ps, while if Ranger 3 Deeps goes ahead, our valuation would rise to $2.71ps. Valuation: $0.37 (DCF, 10% d.r.), assumes no Ranger 3 Deeps We have set our price target at $1.15ps (prev $1.30ps), which is based on a 1/3 weighting of our upside case ($2.71) and 2/3 of the downside case ($0.37ps).
Glyn Lawcock.................. +61-2-9324 3675 Analyst glyn.lawcock@ubs.com Daniel Morgan...................+61-2-9324 3844 Analyst daniel.morgan@ubs.com Jo Battershill......................+61-2-9324 2834 Analyst jo.battershill@ubs.com
Price (31 Jan 2012)........... A$1.33/US$1.42 12-month rating........ Prior: Neutral => Sell 12m price target..... Prior: A$1.30/US$1.38 => A$1.15/US$1.22 Market cap................ A$0.43bn/US$0.46bn Full-Year EPS 2011E..........................A$(0.20) => A$(0.17) 2012E..........................A$(0.22) => A$(0.25)
Energy
Tap Oil Ltd (TAP.AX)
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Dec Qtr: Tallaganda drilling in Feb

Sales revenue impacted by no Woollybutt liftings in the Dec qtr Tap sales revenue was $9.4m below our forecast due to no oil liftings from Woollybutt in the qtr and only two liftings from Harriet. Production of 191 kboe was in line with the Sept qtr but below our forecast due to mechanical problems at Woollybutt. Woollybutt production will cease in April 2012. 2011 EPS reduced on lower than expected sales revenue The lower than forecast Dec qtr sales revenue has reduced our 2011 EPS forecast by 61%. Our 2012 EPS forecast reduces by 2.6% due to the deferral of 4Q11 Woollybutt liftings until 2012 being more than offset by Woollybutt production finishing one month sooner than we had forecast. A minor change to our sales revenue forecast has reduced our 2013 EPS forecast by 6.7%. Outlook A final investment decision to develop the Manora oil field is expected to be made in mid 2012, with first production expected in early 2014 at a peak rate of around 15 kbbl/d (gross). The Tallaganda-1 well in WA-351-P is targeting a prospective resource of 0.8 1.3 Tcf and is expected to commence drilling in late Feb 12. Valuation: $1.00 (prior $1.02) DCF at 10% Our NAV estimate is based on DCF using a 10% nominal discount rate of forecast cash flows over the 2P reserve life of producing assets plus the Manora development. Our share price target is based on our NAV plus exploration upside potential.
Price (31 Jan 2012)........... A$0.78/US$0.83 12-month rating...............Buy (Unchanged) 12m price target................A$1.18/US$1.26 Market cap................ A$0.19bn/US$0.20bn Full-Year EPS 2011E.............................. A$0.04 => A$0.01
ab
UBS Investment Research Reporting Season Events Calendar
Upcoming Company Information

Australasia Financial Sector Comment
1 February 2012 Upcoming company event dates Attached are upcoming event dates.
www.ubs.com/investmentresearch
Lisa Hacking
Assistant lisa.hacking@ubs.com +61-2-9324 3511
February 2012
Monday Tuesday
1
Wednesday
Thursday
2 WES 2QFY12 Sales Result - +61
3 9221 4794 10am EDST
Friday
3
7 BKN Int $49.3m, 17.6cps CDI Int $21.5m, 2.1cps Con Call: 10:00am - Dial-in: 1800 123 296 (Aus) / +612 8314 8370 (Int). Conf ID: 44325950. Webcast: www.challenger.com.au/cdi COH Int $72.9m, 109.5cps Con Call: 2.00pm. Inter-Con Hotel Sydney. Dial in : 1800 850 335 or +61 2 9113 4653 MQG 10:00am Operational Briefing, dial in: passcode: 11380208; +61 2 8023 8415, AUS Toll free 1800 045 913, NZ +64 9912 8819, HK +852 3011 4660, SIN +65 6622 1295, US +1 212 444 0512, UK +44 203 027 1109; webcast: http://www.macquarie.com/mgl/co m/investor-relations; RSVP required: macquarie.shareholders@macqua rie.com
NAB 9:00am Quarterly Trading Update Conf Call - Audio-webcast: www.nabgroup.com/2012FirstQuar terTradingUpdate; Dial in: AUS: 1800 148 258; ID: 44796235; HK: 800 965 808; JPN: 0044 2206 2118; NZ: 0800 667 018; SIN: 800 616 3021; UK: 0800 731 7846; USA: 1866 214 5335; Int'l Dial In: +61 2 8524 6650 TCL Int NPAT n/a, 14.5cps
8 ALZ Fin $133.6m, 10.7cps Con Call: 10:00am - Marble Room, Radisson Blu Plaza Hotel, 27 O'Connell Street. Dial-in: 1800 554 798 (Aus) / 800 901 587 (HK) / 0053 1250 084 (Japan) / 0800 450 585 (NZ) / 800 6163 105 (Sing) / 0808 234 8407 (UK) / 1866 839 8029 (US). Conf ID: 3053238. Webcast: http://www.mediaserver.com/m/p/9st6ou9a/r/1 ANN Int $56.4m, 18.2cps Con Call: 9.30am Stamford Hotel, 111 Little Collins St, Melbourne. Dial in: 1800 801 825 or +61 2 8524 5042 BHP Int $9,975.4m, 56.0cps Con Call: 10.00am AEST Sofitel Hotel, Sydney . Dial in: 1800 558 698 or +61 7 3145 4006 WEB Int $6.0m, 6.1cps Con Call: 12.45pm, Stamford Plaza Hotel, Melb (Dial in: 1800 000 259, Pin: 224 637 0102)
9 AQP Int NPAT n/a, Div n/a

BWP Int $34.9m, 6.7cps Con Call: 4:30pm - Dial-in: 1800 500 931 (Aus) / +613 9221 4420 (Int). Conf ID: 256166. FXL Int $28.1m, 5.5cps NWSA.O 2Q12 result RIO Fin $15,165.9m, 76.0cps Con Call: 7.30pm AEST Dial in: TBA SGP Int $340.5m, 12.3cps Con Call: 11:30am - Stockland Head Office, Level 2, 133 Castlereagh Street. Dial-in: 1800 383 758 (Aus) / +617 3145 4003 (Int). Webcast: www.stockland.com.au TAH Int $183.9m, 13.0cps TLS Int $1,486.6m, 14.0cps Con Call: 9.15am AEST . Dial in: 1800 063 717 or +61 3 8628 3800 Account # 11641064. Conf ID: 11641064
10 NCM Int $546.8m, 18.0cps

Con Call: 11.00am AEST. Dial in : 1800 801 825 or +61 2 8524 5042. Conf ID: 2326629
Source: UBS estimates; Company data
This report has been prepared by UBS Securities Australia Ltd UBS 7 SEE REQUIRED DISCLOSURES SECTION AT END OF NOTES. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
Reporting Season Events Calendar 1 February 2012
February 2012
Monday
13 JBH Int $79.2m, 48.0cps
LEI Int $271.3m, 58.0cps
Tuesday
14 BOL Int $11.6m, 0.0cps
GWA Int $26.1m, 9.5cps OKN Int $7.6m, 5.1cps Con Call: 11.00am (Dial in: 1800 123 296 or +612 8314 8370, Pin: 44789186) PDN Int -$28.3m, 0.0cps SAI Int $24.4m, 6.6cps
Wednesday
15 CBA Int $3,485.0m, 138.0cps
Con Call: 10:30am result briefing; venue: Colonial Theatre, Lvl 20, 201 Sussex St; Dial in: ID: 2062600, AUS: 1800 801 825 or +61 2 8524 5042, HK: 800 905 927; Webcast: www.commbank.com.au/sharehol der; Replay: ID: 206260, AUS: 1800 008 585, Intl: +61 2 9641 7900; RSVP required to fiona.cribbin@cba.com.au COF Int $3.7m, 0.0cps Con Call: 11.00am, Sofitel Wentworth, Syd (Dial in: 1800 801 825 or +612 8524 5042, Pin: 7883518) CRZ Int $31.2m, 10.7cps Con Call: 10.30am AEST Dial in: 1800 801 825 or +61 2 8524 5042 Conf ID: 9352200 DMP Int $12.2m, 12.4cps Con Call: 12.30pm (Dial in: 1800 354 715 or +612 8823 6760, Pin: 44059964) DXS Int $185.9m, 2.7cps Con Call: 11:00am EVR Dec Qrt production report FMG Int $816.8m, 4.0cps HFA Int $1.4m, 1.2cps OZL Fin $310.2m, 21.0cps PRY Int $69.1m, 8.1cps Con Call: 11.00am AEST - L3, 156 Gloucester St. Sydney. Dial in TBA SGT Int $965.8m, 16.1cps SGT 3Q12 Result SKC Int $77.1m, 8.0cps TRS Int $14.9m, 15.5cps WDC Fin $1,485.9m, 24.8cps Con Call: 9:00am - Dial-in: 1800 500 931 (Aus) / 800 908 216 (HK) / 0053 179 0003 (Japan) / 0800 449 117 (NZ) / 800 616 2071 (Sing) / 0800 068 9917 (UK) / 1877 311 0757 (US) / +613 9221 4420 (Int). Conf ID: 256259. WRT Fin $565.5m, 8.6cps Con Call: 3:00pm - Dial-in: 1800 500 931 (Aus) / 800 908 216 (HK) / 0053 179 0003 (Japan) / 0800 449 117 (NZ) / 800 616 2071 (Sing) / 0800 068 9917 (UK) / 1877 311 0757 (US) / +613 9221 4420 (Int). Conf ID: 256376.
Thursday
16 AAD Int $21.7m, 6.5cps
ABC Fin $148.3m, 10.0cps AMP Fin $871.9m, 14.0cps ASX Int $178.4m, 91.6cps Con Call: 10:00am result briefing; venue: Exchange Centre Auditorium, 20 Bridge St; Dial in: +61 2 9007 3187, ID: 725618; Webcast: http://www.asxgroup.com.au; RSVP required to sheriee.smith@asx.com.au AWC Fin $130.8m, 3.0cps BXB Int $296.3m, 13.5cps Con Call: 10:15am result briefing GFF Int $69.0m, 3.1cps
Friday
17 AHE Int $31.9m, 7.0cps
ANZ Quarterly Trading Update & APS 330 (audio webcast) - details tbc BBG Int $28.3m, 0.0cps CQR Int $42.6m, 13.0cps Con Call: 9:00am - Heritage Ballroom, The Westin, No. 1 Martin Place. Dial-in: 1800 030 272 (Aus) / +852 5808 2597 (HK) / +65 3158 2703 (Sing) / +64 9365 2890 (NZ) / +44 203 364 5204 (UK) / +1 240 254 3160 (US) / +612 9001 2120 (Int). Pass Code: 586383#. Webcast: www.charterhall.com.au/cqr DUE Int $48.2m, 8.0cps SPT Int $19.7m, 3.8cps STO Fin $474.7m, 15.0cps TWE Int $58.1m, 6.3cps
GMG Int $230.8m, 1.9cps Con Call: 9:30am - Dial-in: 1800 801 825 (Aus) / 800 905 927 (HK) / 0120 271 900 (Japan) / 0800 452 905 (NZ) / 800 616 3222 (Sing) / 0800 015 9725 (UK) / 1855 298 3404 (US) / +612 8524 5042 (Int). Conf ID: 7500968. Webcast: http://investors.goodman.com/pho enix.zhtml?c=167466&p=irolIRHome MRM Int $24.8m, 5.2cps QAN Int $99.3m, 0.0cps Con Call: 1:30pm result briefing QRN Int $161.5m, 4.5cps Con Call: 11:45am result briefing SLM Int $21.2m, 8.3cps Con Call: 9.00am (Dial in: +612 8314 8370, Pin: 48234770) WBC 10:00am Quarterly Trading Update Conf Call ; Audio-webcast: www.westpac.com.au/investorcent re; Dial in: 1800 354 715 or +61 2 8823 6760, ID: 46129280; Replay: 1800 766 700 or +61 2 8235 5000; ID: 46129280 WES Int $1,176.4m, 68.0cps
UBS 8
Reporting Season Events Calendar 1 February 2012
February 2012
Monday
20 AMC Int $337.9m, 21.5cps
BEN Int $160.8m, 30.0cps CGF Int $134.9m, 8.0cps GPT Fin $414.4m, 8.8cps Con Call: 11:00am - Auditorium, Level 51, MLC Centre, 19 Martin Place. Dial-in: 1800 801 825 (Aus) / 800 905 927 (HK) / 0120 271 900 (Japan) / 800 616 3222 (Sing) / 0800 015 9725 (UK) / 0800 015 9725 (US) / +612 8524 5042 (Int). Participant Passcode: 9151817. Webcast: www.gpt.com.au LLC Int $197.0m, 20.7cps Con Call: 11:00am - The Westin Sydney, Level 6, Heritage Ballroom, No. 1 Martin Place. Dialin: 1800 354 715 (Aus) / 800 968 831 (HK) / 0053 125 0068 (Japan) / 0800 452 569 (NZ) / 800 616 2236 (Sing) / 0808 234 7860 (UK) / 1866 242 1388 (US) / +612 8223 6760 (Int). Webcast: www.lendlease.com
Tuesday
21 BLY Fin $151.2m, 5.2cps
Con Call: 3:00pm AEDT, venue: Museum of Sydney - AGL Theatre, Corner Bridge & Phillip Sts, dial in details tbc CFX Int $185.1m, 6.5cps Con Call: 9:30am - Colonial Theatre, Level 20, Tower 1 Darling Park, 201 Sussex Street. Dial-in: 1800 801 825 (Aus) / +612 8524 5042 (Int). Passcode: 5207361. Webcast: www.cfsgam.com.au/cpa. CPA Int $88.9m, 2.8cps Con Call: 10:30am - Colonial Theatre, Level 20, Tower 1 Darling Park, 201 Sussex Street. Dial-in: 1800 801 825 (Aus) / +612 8524 5042 (Int). Passcode: 5207361. Webcast: www.cfsgam.com.au/cpa. CQO Int $69.1m, 10.0cps Con Call: 9:00am DOW Int $79.1m, 0.0cps EHL Int $35.9m, 3.1cps FLT Int $84.9m, 45.0cps IVC Fin $37.1m, 16.0cps MAH Int $21.0m, 0.9cps MGR Int $168.6m, 4.2cps Con Call: 10:00am - Mirvac offices, Level 26, 60 Margaret St. Dial-in: 1800 558 698 / +612 9007 3187 (Int). Conf ID: 725 568. Webcast: www.mirvac.com MND Int $58.0m, 49.7cps REA Int $40.0m, 18.5cps Con Call: 4.00pm AEST Dial in: 1800 500 931 or +61 3 9221 4420 Conf ID: 255650 SRV Int $6.7m, 7.5cps WHG Int $13.0m, 3.0cps
Wednesday
22 AAX Fin $21.8m, 5.7cps
AIO Int $145.8m, 4.5cps APA Int $70.6m, 16.8cps CCL Fin $532.4m, 28.6cps CPU Int $128.3m, 15.0cps CSL Int $503.4m, 36.2cps IFL Int $49.9m, 18.0cps MOC Int $7.5m, 6.0cps SEK Int $56.7m, 7.6cps SMX Int $15.5m, 12.5cps SUL Int $37.2m, 12.0cps Con Call: 10.00am (Dial in: 1800 801 825 or +612 8524 5042, Pin: 6632373) SUN Int $421.1m, 20.0cps SWM Int $161.3m, 19.0cps TOX Int $7.8m, 1.6cps WPL Fin $1,629.8m, 49.3cps WTF Int $27.2m, 10.1cps
Thursday
23 APN Fin $74.6m, 5.0cps
BRG Int $31.3m, 10.5cps CAB Int $32.9m, 17.8cps CHC Int $43.1m, 11.7cps Con Call: 9:30am ENV Int NPAT n/a, Div n/a FKP Int $55.6m, 1.6cps FWD Int $27.5m, 35.7cps FXJ Int $126.8m, 2.7cps Con Call: 11.00am AEST. Hilton Hotel, Sydney. Dial in: 1800 030 272. Conf ID: 593697 www.fxj.com.au IAG Int $97.6m, 4.0cps Con Call: 10:30am result briefing, venue: Ballroom 1, Westin Hotel, 1 Martin Place ; Dial in: ID: 725606; AUS: 1800 558 698, HK: 800 966 806, NZ: 0800 453 055, SIN: 800 101 2785, Intl: +61 2 9007 3187; Webcast: http://www.iag.com.au/results/inde x.shtml; RSVP required: investor.relations@iag.com.au IDL Int $29.7m, 2.8cps
Friday
24 AGK Int $258.0m, 31.5cps
ASB Int $19.7m, 0.0cps CWN Int $218.2m, 18.0cps EGP Fin $67.6m, 4.0cps LDW Fin $12.0m, 10.2cps NWH Int $41.5m, 6.0cps OSH Fin $220.3m, 2.0cps PBG Int $33.3m, 2.0cps PNA Fin $135.6m, 0.0cps Con Call: 11.00am AEST. Dial in 1800 558 698 or +61 2 9007 3187. Conf ID: 725642 TEL Fin NPAT n/a, 8.5cps
SFH Int $8.6m, 0.0cps UGL Int $71.5m, 30.0cps
ILU Fin $525.3m, 45.0cps Con Call: 11.00am AEST Dial in: 1800 123 296 or +61 2 8314 8370 Conf ID: 45678579 IOF Int $64.7m, 1.9cps Con Call: 10:00am - The Mint, 10 Macquarie Street ORG Int NPAT n/a, 25.0cps PPT Int $29.8m, 68.0cps SYD Fin -$380.8m, 10.0cps TOL Int $182.7m, 11.5cps TPI Int $32.4m, 0.0cps TTS Int $164.0m, 11.0cps VAH Int $72.5m, 0.0cps
27 AUB Int $10.7m, 9.5cps

CTX Fin $262.3m, 28.0cps GFF AB Foods trading update (parent of peer George Weston) JHX Fin $41.2m, 9.1cps ROC Fin $1.5m, 0.0cps SKI Fin $109.3m, 4.8cps
28 ALL Fin $53.8m, 4.0cps

AWE Int -$14.5m, 0.0cps BPT Int $45.0m, 0.8cps HVN Int $112.4m, 5.5cps IFN Int $4.9m, 0.0cps QBE Fin $859.4m, 25.0cps SXL Int $50.8m, 4.3cps TWE Australian Vintage H112 result (wine industry trends)
29 HGGH.L Fin $118.1m, 515.0cps

HST Int -$40.2m, 0.0cps MQA Fin $61.1m, Div n/a TAP Fin $8.6m, 0.0cps WOR Int $154.9m, 44.0cps
Statement of Risk N/A
UBS 9
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UBS Investment Research Australian Monthly Market Wrap
January 2012

Australia Equity Strategy Market Comment
1 February 2012 Markets At A Glance Equities rally on falling risk aversion. Cyclicals outperform. Government bond yields little changed. Australian dollar rallies. Commodity prices generally rise. Domestic economic data on the weak side. US employment data improving. European sovereign credit ratings downgraded. Best & Worst Performers The best performing Australian large-cap stocks during the month included Paladin Energy (+34.3%), Lynas Corporation (+26.8%) and Boart Longyear (+26.6%). The worst performers included QBE Insurance Group (-11.5%), Transfield Services (7.4%) and Seek (-7.2%). Table 1: Performance During January
ASX200 index MSCI Australia index in US$ MSCI AC World index in US$ MSCI World Developed Markets index in US$ MSCI World Emerging Markets index in US$ MSCI US index in US$ MSCI Europe index in US$ MSCI Asia ex Japan index in US$ MSCI Japan index in US$ ASX200 Materials ASX200 Energy ASX200 Industrials ASX200 REITs ASX200 Consumer Discretionary ASX200 Financials ex REITs ASX200 Utilities ASX200 Consumer Staples ASX200 Telcos ASX200 Health Care RBA cash rate Australian government 10-year bond yield Australian dollar Gold (Spot $/oz) Oil (WTI Spot) Source: IRESS, Bloomberg, Datastream Note: Equity index returns are total return 4.25% 3.72% $1.062 $1,738.60 $98.29 +5.1% +8.8% +5.8% +5.0% +11.4% +4.7% +4.7% +10.8% +4.5% +10.3% +8.3% +6.3% +5.4% +4.3% +2.9% +2.5% +0.8% +0.1% -1.2% unchanged +5bp +4.1c +$174.90 -$0.57 www.ubs.com/investmentresearch
David Cassidy
Strategist david.cassidy@ubs.com +61-2-9324 3721
Dean Dusanic
Strategist dean.dusanic@ubs.com +61-2-9324 3785
Australian Monthly Market Wrap 1 February 2012
Table 2: Best & Worst Large-Cap Stock Total Returns During January
BEST Paladin Energy Lynas Corporation Boart Longyear Leighton Holdings Goodman Fielder Perseus Mining Sims Metal Management Fortescue Metals Group Toll Holdings Iluka Resources Atlas Iron Alumina Limited Rio Tinto Newcrest Mining Aquarius Platinum Downer EDI UGL Goodman Group Harvey Norman Boral WORST QBE Insurance Group Transfield Services Seek Treasury Wine Estates Computershare Cochlear Primary Health Care Spark Infrastructure Group CSL Amcor Insurance Australia Group Transurban Group ASX Ramsay Health Care Woolworths Sonic Healthcare GrainCorp BlueScope Steel Crown Limited Metcash Source: IRESS QBE.ax TSE.ax SEK.ax TWE.ax CPU.ax COH.ax PRY.ax SKI.ax CSL.ax AMC.ax IAG.ax TCL.ax ASX.ax RHC.ax WOW.ax SHL.ax GNC.ax BSL.ax CWN.ax MTS.ax -11.5% -7.4% -7.2% -5.7% -4.5% -4.2% -3.2% -2.9% -2.7% -2.4% -2.3% -2.3% -1.9% -1.6% -1.2% -0.4% -0.1% +0.0% +0.0% +0.0% PDN.ax LYC.ax BLY.ax LEI.ax GFF.ax PRU.ax SGM.ax FMG.ax TOL.ax ILU.ax AGO.ax AWC.ax RIO.ax NCM.ax AQP.ax DOW.ax UGL.ax GMG.ax HVN.ax BLD.ax +34.3% +26.8% +26.6% +23.1% +20.7% +19.6% +19.0% +18.3% +18.2% +18.2% +14.8% +14.8% +14.7% +13.9% +13.2% +12.8% +12.6% +12.3% +12.3% +12.2%
UBS 11
General Market Overview

Equities Rally On Falling Risk Aversion
Global equity markets rallied during January on falling risk aversion as further progress was made toward resolving the Euro-zone sovereign debt crisis, US economic data continued to signal improvement and Chinese economic data continued to suggest an economic soft landing. Not surprisingly, emerging market equities outperformed other markets. Australian equities outperformed (particularly in US$ terms) due to strong performance from Mining Stocks
Cyclicals Outperform
Cyclical sectors generally outperformed defensives, both domestically and globally, with Mining & Metals the best performing sector. Global Financials performed well, boosted by strong rallies in European banks, though Australian banks lagged behind. Australian Discretionary Retail stocks rebounded strongly during the month.
Bonds
Government Bond Yields Little Changed
Government bond yields were generally little changed over the month. Italian and Spanish government bond yields fell after European Union member states finalised a stricter fiscal-discipline treaty. Greece continued with negotiations over a debt-swap agreement. Portuguese government bond yields rose sharply on growing concerns the country would share a similar fate to Greece.
Currencies
Australian Dollar Rallies
The Australian dollar rallied against most major currencies, particularly the US dollar, on falling risk aversion.
Commodities
Commodity Prices Generally Rise
January was a good month for commodities, with almost all major commodities posting price rises. Silver was the outstanding commodity during the month, rising 19%. Base metals performed well, with all posting double-digit price gains. Oil was little changed during the month.
Domestic Economic Highlights

Domestic Economic Data On The Weak Side
Retail sales disappointed again with a flat 0%m/m result (consensus: +0.3%) for November. Residential approvals rebounded a better-than-expected 8.4%m/m (consensus: +7.0%) for November, albeit after unexpectedly dropping by 10.0%m/m in October. Employment was much weaker than expected, falling 29,300 (consensus: +10,000) for December. However, the unemployment rate was unchanged at 5.2% reflecting a fall in the participation rate.
UBS 12
Overseas Economic Highlights

US Employment Data Improving
The manufacturing ISM index rose to a better-than-expected 53.9 (consensus: 53.4, previous: 52.7) for December. The non-manufacturing ISM index rose to a lower-than-expected 52.6 (consensus: 53.0, previous: 52.0) for December. Nonfarm payrolls rose 200k (consensus: 155k) in December and the unemployment rate fell to 8.5% (consensus: 8.7%, previous: 8.7%). The current activity index in the Philadelphia Fed manufacturing survey edged up to 7.3 (consensus: 10.3, previous: 6.8) for January. The Empire State manufacturing index rose to 13.5 (consensus: 11.0, previous: 8.2) for January. The Chicago PMI slipped to 60.2 (consensus: 63.0, previous: 62.2) in January. US real GDP rose 2.8% at an annual rate in Q4 (consensus: +3.0%, previous: +1.8%).
Fed Expects Low Rates To Late 2014 & Adopts Inflation Target
The FOMC released statements promising low rates at least through late 2014 rather than mid-2013 previously suggested. Also announced, officials formally agreed on an explicit inflation target, noting that a longer-run goal for inflation of 2 percent, as measured by the annual change in the price index for personal consumption expenditures as being most consistent with their mandate.
European Sovereign Credit Ratings Downgraded
Standard & Poor's downgraded the credit ratings of nine euro-zone countries and put 14 euro-zone states on negative outlook for a possible further downgrade France and Austria lost their triple-A status and Portugal was reduced to junk status. Germany was the only euro-zone member to survive unscathed with its triple-A rating and a stable outlook. Standard & Poors said its actions were primarily driven by our assessment that the policy initiatives that have been taken by European policymakers in recent weeks may be insufficient to fully address ongoing systemic stresses in the euro-zone".
Chinese Economic Data Suggests Economy Is Holding Firm
The official PMI rebounded from 49 to 50.3, and the HSBC PMI also rebounded from 47.7 to 48.7 for December. GDP rose 8.9%y/y (consensus: +8.7%) for Q4. CPI rose 4.1%y/y (consensus: +4.0%) for December. Q4 GDP growth came in at 8.9%y/y (consensus: 8.7%) and December CPI came in at 4.1%y/y (consensus: 4.0%).
European Manufacturing Surveys Surprise
Euro-zone manufacturing PMI rose to a better than expected 48.7 (consensus: 47.3, previous: 46.9) whilst services PMI rose to 50.5 (consensus: 49.0, previous: 48.3) pointing to further stabilisation.
Stock Specific Highlights

Leighton Holdings Upgrades Guidance
Leighton Holdings lifted its guidance for underlying profit after tax to approximately $270m compared to previous guidance of around $250m improved earnings from the Groups operations in Australia and Asia. It noted good progress in major projects such as the Airport Link and the Victorian Desalination Project. LEI shares rose 4.4% on the day of the announcement.
UBS 13
Lynas Corporation Announces Upgrade & Secures Funding
18th January. Lynas Corporation announced a Mineral Resource estimate for Mount Weld of 23.9 million tonnes, a 37% increase versus the previous Resource estimate. LYC shares rose 4.4% on the day of the announcement. 24th January. Lynas secured long-term funding to complete construction and commissioning of Phase 1 of the Lynas Advanced Materials Plant in Malaysia. LYC shares rose 5.1% on the first trading day following the announcement.
Pacific Brands Receives Approach From Private Equity
10th January. Pacific Brands Group announced it had received an unsolicited approach from private equity group KKR regarding a possible takeover of the company. PBG shares rose 14.3% on the day of the announcement.
Paladin Energy Reports Strong Production
19th January. Paladin Energy achieved record production in the three months to December and re-affirmed its full-year production targets. PDN shares rose 5.9% on the day of the announcement.
QBE Insurance Downgrades Guidance
12th January. QBE Insurance Group reduced its guidance for FY11 insurance profit margin to 7.0-7.5% compared to previous guidance of 11.0%, due to record level of catastrophe claims experienced by the insurance industry and unrealised losses from the impact of difficult investment markets. QBE shares fell 12.7% on the day of the announcement.
UBS 14
Statement of Risk Equity market returns are influenced by corporate earnings, interest rates, and investor demanded risk premiums. The outlook for any and all of these variables is subject to change
UBS 15
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UBS Investment Research Australian Quantitative Strategy

Australia Quantitative Quantitative Strategy
1 February 2012 Two speed reporting season Both the level of earnings growth and earnings revisions point to a two speed reporting season with resource services, general industrials, and healthcare faring better than the consumer related sectors and financials. What to look for Financial statement quality, value and earnings revisions drive outperformance through reporting season. We find that financial statement quality combined with value provides the greatest outperformance in a long-short model, whilst value combined with earnings revisions provides the greatest outperformance on the long side. What else works? In a world of slower growth dividends will matter. With many Australian companies currently carrying excess cash and franking credits on their balance sheets, we believe focussing on companies with fully franked dividends can provide investors with a free kick. Potential surprises Potential upside surprise: Flight Centre, Primary Health Care, Sonic Healthcare, Dexus Property Group, DUET Group, Sigma Pharmaceuticals, AGL Energy, Boart Longyear, Carsales.com. Potential downside surprise: Downer EDI, Ten Network, Seven West Media, Woodside Petroleum, SEEK, Transpacific Industries Group, Aquila Resources. Potential buybacks or special dividend: JB Hi-Fi, Flight Centre, Carsales.com, SMS Management, and Rio Tinto. Chart 1: Performance of strategies through reporting dates
6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 Days
Source: UBS, IBES, Aspect Financial www.ubs.com/investmentresearch
Paul Winter
Analyst paul-j.winter@ubs.com +61-2-9324 2080
Oliver Antrobus, CFA

Analyst oliver.antrobus@ubs.com +61-3-9242 6467
Vyas Balasubramanian, CFA

Analyst vyas.balasubramanian@ubs.com +61-2-9324 2728
High - Low FSQ & Value (mean) High - Low FSQ & EPS rev isions (mean) High - Low Value & EPS rev isions (mean)
20
Australian Quantitative Strategy 1 February 2012

Two speed reporting season
With the Australian reporting season kicking off, we expect a further slowdown in aggregate earnings growth and a continuation of the dual speed economy. Looking at earnings growth rates and analyst net estimate revisions across sectors points to resource services, general industrials, and healthcare faring better than the consumer related sectors and financials.
Table 1: Earnings Growth

FY10 actual Market Market ex Resources Resources Mining & Metals Energy Financials Banks Insurance REITs Other Financials Industrials-ex-financial Discretionary Retail Consumer Staples Health Care Media Gaming Other Materials Telcos General Industrials Utilities Source: UBS estimates 8.1% 3.7% 23.6% 28.0% 5.7% 6.3% 22.4% -14.3% -26.5% 4.0% -0.8% 18.9% -1.4% -3.1% 14.8% -4.7% 1.4% -4.7% -3.2% 12.7% FY11E 9.7% 2.6% 30.5% 35.7% 4.9% 5.0% 9.8% -21.0% 7.4% -7.1% -1.5% -4.4% 6.3% 3.8% 0.9% 1.6% 5.8% -16.8% -4.0% -1.2% FY12E 5.9% 6.7% 3.9% 2.5% 13.0% 5.0% 2.6% 33.7% 4.4% -6.2% 10.0% -9.1% 7.6% 7.2% 1.0% 1.8% 7.7% 11.3% 28.6% 9.6% FY13E 9.3% 7.1% 14.7% 14.3% 16.6% 5.3% 2.2% 22.3% 4.4% 15.4% 10.4% 13.9% 10.2% 13.5% 12.9% -17.0% 13.7% 8.4% 16.8% 3.6%
UBS 17
Table 2: Analyst net estimate revisions ((up-down)/total)

Analyst net revisions (3 month) Financial-x-Property Trusts Consumer Staples Materials Consumer Discretionary Health Care Information Technology Telecommunications Services Property Trusts Industrials Energy Utilities Source: IBES -74% -57% -51% -50% -30% -25% -25% -12% -6% 5% 13%
What to look for

We conduct an event study to investigate the performance of Financial Statement Quality (FSQ12), value (SuperValue3), and earnings revisions (three month earnings revisions) through historical reporting dates since 2000. We then look at the intersection of these three factors in order to understand the performance of the intersections as well as the performance through various market conditions.
Chart 2: Performance of Financial Statement Quality, Value and Earnings Revisions
2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% -2.0% -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 Days High - Low FSQ (mean) Cheap - Ex pensiv e Value (mean) High - Low earnings rev isions (mean) 4 6 8 10 12 14 16 18 20
Source: UBS, IBES, Aspect Financial
1 2 3
Winter, et al. Quality drives outperformance 2010-10-23 Winter, et al. Quality drives outperformance in the banking sector 2011-01-27 Balasubramanian, et al. SuperValue 2010-04-01 UBS 18
Financial Statement Quality

Our Financial Statement Quality model aims to measure the overall quality and improvement in a companys financial and operational position year-on-year. Overall, we find that whilst high FSQ companies tend to outperform the market, their outperformance increases around reporting dates. Similarly, whilst low quality companies underperform, their underperformance is exaggerated through reporting dates. This is in line with Piotroskis finding that around one sixth of the annual excess return of high vs. low F-score companies occurs around reporting dates4.
Chart 3: High & Low Financial Statement Quality

1.5% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% -20 -15 -10 -5 0 5 10 15 20 Days High FSQ mean Low FSQ mean High FSQ median Low FSQ median
Chart 4: High - Low Financial Statement Quality

2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% -20 -15 -10 0 -5 Days High - Low FSQ (mean) High - Low FSQ (median) 5 10 15 20
UBS 19
Source: UBS, Aspect Financial
High FSQ companies outperform the market by an average of 1.8% over 30 days (10 pre and 20 post reporting), with a hit rate of 57%. However, a strategy of investing in these companies outperformed the market every year with the exception of 2008 where it underperformed marginally by 0.1%. Low FSQ companies underperformed the market by 1.1% with a hit rate of 54%. Importantly, low FSQ companies tend to have significantly higher levels of volatility than higher FSQ companies5 (on average 40 vs. 32%). The long/short performance was 2.9%, however, given the higher volatility of low FSQ companies, the strategy underperformed in the low quality rallies of 2006 (resources boom) and 2009 (GFC recovery).
Piotroski, 2000, Value investing, The use of historical financial statement information to separate winners from losers.
4 5
Winter, et al. Quality drives outperformance 2010-10-23
Table 3:Performance by year

High FSQ 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1.0% 3.7% 2.2% 1.2% 2.2% 1.7% 2.3% -0.1% 2.5% 1.7% 1.3% Low FSQ -10.5% 0.4% -1.5% -2.5% -1.1% 4.0% -2.8% -9.7% 3.7% 1.7% -2.2% High - Low FSQ 11.5% 3.2% 3.7% 3.7% 3.3% -2.3% 5.1% 9.6% -1.2% -0.1% 3.6%
Chart 5: High Low FSQ performance by year

14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
5 Low
Understanding the factor tilts
Assessing the distribution of high and low FSQ scores across Value (Chart 6) and Earnings Revisions (Chart 7) quintiles illustrates that high FSQ has tilts towards both expensive stocks and positive earnings revisions. On the other hand, low FSQ has tilts towards both cheap value as well as low earnings revisions.
Chart 6: Financial Statement Quality distribution across SuperValue quintiles

30% 25% 20% 15% 10% 5% 0% 1 Cheap
Chart 7: Financial Statement Quality distribution across Earnings Revisions quintiles

30% 25% 20% 15% 10% 5% 0% High FSQ Low FSQ
High FSQ
Low FSQ
3 Value
5 Ex pensiv e
1 High
3 Earnings Revisions
2011
UBS 20
Value
Our SuperValue model takes a sector neutral approach to valuation and utilises different valuation metrics for different sectors. Overall, we find that cheap stocks outperform through reporting dates whilst expensive stocks underperform over 30 days (10 pre and 20 post reporting). This is in line with both Style Migration theory6 as well as The Mispricing Effect78. However, expensive stocks tend to outperform slightly post-reporting. This may be partially explained by the factor tilts (charts 11 and 12). Given that expensive stocks are tilted towards both high FSQ as well as high earnings revisions, there may be positive momentum from the stock as the expectation of a good result is confirmed. However, ultimately the stock remains expensive and as a consequence underperforms in the longer term. Cheap value companies have outperformed by an average of 1.6% with a hit rate of 56%. The strategy of buying cheap companies pre-reporting season worked every year of the past 11 with the exception of 2008 when value as a style underperformed badly during the Global Financial Crisis. Expensive companies have underperformed by 0.4% with a hit rate of 51%. The long/short performance was 1.9% and was profitable in all years with the exception of 2008.
Chart 8: Cheap & Expensive Value

1.5% 1.0% 0.5% 0.0% -0.5% -1.0% -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 Cheap v alue mean Cheap v alue median
Source: UBS, Aspect Financial, IBES
Chart 9: Cheap - Expensive Value

2.0% 1.5% 1.0% 0.5% 0.0% -0.5% -1.0%
Ex pensiv e v alue mean Ex pensiv e v alue median
6 7 8
Fama and French 2007, Jessop et al, Understanding Style Migration 2008 Lakonishok, Shleifer and Vishny, 1994. Winter et al, Styles through the cycle 2011 UBS 21
-20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20

Cheap v alue mean Days Ex pensiv e v alue mean
Days
Table 4: Performance by year

Expensive Value 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 -2.7% -0.9% 0.9% -0.2% -0.2% 2.0% 1.9% -0.6% -0.8% -1.7% -2.9% Cheap Value 4.2% 2.6% 1.9% 0.4% 2.0% 3.9% 1.9% -3.9% 2.5% 2.1% 0.5% Cheap - Expensive Value 6.9% 3.5% 1.1% 0.6% 2.2% 1.9% 0.0% -3.3% 3.3% 3.8% 3.4%
Chart 10: Cheap - Expensive Value performance by year

8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
5 Low
Assessing the distribution of expensive and cheap value across Financial Statement Quality scores (Chart 11) and Earnings Revisions quintiles (Chart 12) illustrates that expensive stocks are tilted towards both higher quality stocks and positive earnings revisions. On the other hand, cheap value has tilts towards both low quality as well as low earnings revisions.
Chart 11: Value distribution across FSQ scores

30% 25% 20% 15% 10% 5% 0% 1 Low 2 3 4 5 6 7 8 9 High Ex pensiv e v alue Cheap v alue
Chart 12: Value distribution across Earnings Revisions quintiles

Ex pensiv e v alue 30% 25% 20% 15% 10% 5% 0% 1 High 2 3 Earnings Revisions 4 Cheap v alue
Financial Statem ent Quality
2011
UBS 22
Earnings Revisions (3 month)

Our preferred earnings revisions factor utilises the three month change in the FY1 and FY2 earnings numbers. We find that stocks with high earnings revisions outperform in the ten days surrounding the reporting date (five days prior and five days post) with 70% of the outperformance occurring prior to the announcement. The strategy outperforms the market by 1.5% with a hit rate of 55% and outperformed in nine out of the past eleven years with 2001 and 2008 being the exceptions.
Chart 13: High & Low Earnings Revisions
1.0% 0.5% 0.0% -0.5% -1.0% -1.5% -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 Days High earnings rev isions mean High earnings rev isions median
Chart 14: High - Low Earnings Revisions

1.0% 0.5% 0.0% -0.5% -1.0% -1.5%
Low earnings rev isions mean Low earnings rev isions median

High - low High EPS rev's 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 -1.3% 2.4% 1.6% 2.6% 1.6% 2.7% 3.3% -2.0% 1.7% 2.7% 0.1% Low EPS rev's 1.5% -0.8% 1.2% -0.8% 3.0% 3.0% -0.8% -3.9% 3.5% 3.3% -2.8% EPS rev's -2.7% 3.2% 0.5% 3.5% -1.4% -0.3% 4.2% 1.9% -1.8% -0.5% 2.9%
Chart 15: High Low Earnings Revisions performance by year

5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0%
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Stocks with low earnings revisions underperform into the reporting date as expected. However, they subsequently outperform post the earnings announcement. This renders the long-short strategy obsolete. A possible explanation for this outperformance is that companies with low earnings revisions tend to be significantly tilted towards cheap value, which as we have seen previously outperforms post the reporting date.
2011
UBS 23
-20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20

Days High - Low earnings rev isions (mean) High - Low earnings rev isions (median)
Assessing the distribution of high and low Earnings Revisions across Financial Statement Quality scores (Chart 16) and Value quintiles (Chart 17) illustrates that stocks with high earnings revisions are tilted towards both higher quality as well as being more expensive. On the other hand, low Earnings Revisions has tilts towards both low quality as well as cheap value.
Chart 16: Earnings Revisions distribution across FSQ scores

High Earnings rev isions 30% 25% 20% 15% 10% 5% 0% 1 Low 2 3 4 5 6 7 8 9 High Low Earnings rev isions
Chart 17: Earnings Revisions distribution across Value quintiles

High Earnings rev isions 35% 30% 25% 20% 15% 10% 5% 0% 1 Cheap
Low Earnings rev isions
3 Value
5 Ex pensiv e
Financial Statement Quality
UBS 24
Intersection analysis
Financial Statement Quality with Value
The intersection of FSQ and Value improves the performance on both the long and the short strategies relative to the component factors. The long side of the strategy produced an excess return of 2.1% over 30 days with a hit rate of 61% and was profitable in nine out of the last eleven years. The short side however underperformed by 4.7% with a hit rate of 67% and was profitable in nine out of the last eleven years. The long/short strategy produced an excess return of 6.8% and was profitable in ten of the past eleven years with its only underperformance occurring in 2010.
Chart 18: High & Low FSQ & Value

3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% High FSQ, Low FSQ, High FSQ, Low FSQ, cheap v alue (mean) ex p. v alue (mean) cheap v alue (median) ex p. v alue (median) Days
Chart 19: High - Low FSQ & Value

6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0%
-20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20
High - Low FSQ & Value (mean) High - Low FSQ & Value (median)
-20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20
Days

High FSQ, cheap value Low FSQ, exp. Value High - low FSQ & value 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 4.0% 3.1% 3.3% 1.8% 4.3% 2.5% 2.1% -3.0% -0.2% 2.1% 0.8% -17.2% -8.8% -3.0% 0.4% -9.5% -0.5% -8.2% -3.4% -16.5% 2.4% -6.6% 21.2% 11.9% 6.3% 1.4% 13.8% 3.0% 10.3% 0.3% 16.3% -0.3% 7.4%
Chart 20: High Low FSQ & Value performance by year

25.0% 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
UBS 25
Financial Statement Quality with Earnings Revisions

The intersection of FSQ and Earnings revisions improves the performance on the short strategy but not on the long strategy relative to the component factors. The long side of the strategy produced an excess return of 1.5% over 30 days with a hit rate of 55% and was profitable in eight out of the last eleven years. The short side however underperformed by 2.0% with a hit rate of 55% and was profitable in seven out of the last eleven years. The long/short strategy produced an excess return of 3.4% and was profitable in nine of the past eleven years with its only underperformance occurring in 2006 and 2007.
Chart 21: High & Low FSQ & Earnings Revisions

2.0% 1.0% 0.0% -1.0% -2.0% High FSQ & EPS rev 's Low FSQ & EPS rev 's High FSQ & EPS rev 's Low FSQ & EPS rev 's
Chart 22: High - Low FSQ & Earnings Revisions

3.0% 2.0% 1.0% 0.0% -1.0%
-20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20
-2.0% -3.0%
High - Low FSQ & EPS rev 's High - Low FSQ & EPS rev 's
-20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20
(mean) (mean) (median) (median)
Days
Days

High FSQ & EPS rev's Low FSQ & EPS rev's High - Low FSQ & EPS rev's 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 3.2% -0.1% 3.6% 0.2% 2.1% 3.6% -0.8% -4.0% 8.7% 6.5% 1.0% -16.0% -0.7% -0.6% -0.5% -0.8% 7.5% 2.5% -4.8% 0.1% 1.5% -4.8% 19.2% 0.6% 4.2% 0.7% 2.9% -3.9% -3.3% 0.8% 8.7% 5.0% 5.8%
Chart 23: High Low FSQ & Earnings Revisions performance

25.0% 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
UBS 26
Value with Earnings Revisions

The intersection of Value and Earnings revisions improves the performance on both the long and the short strategies relative to the component factors. The long side of the strategy produced an excess return of 2.5% over 30 days with a hit rate of 63% making it the strategy with the best performance statistics on the long side. Unfortunately, whilst the return and hit rate look promising, the strategy has only been profitable in six of the past eleven years. The short side underperformed by 0.5% with a hit rate of 50% and was profitable in five out of the last eleven years. And the long/short strategy produced an excess return of 3.1% and was profitable in seven of the past eleven years.
Chart 24: Cheap value, high EPS revisions & expensive value, low EPS revisions
3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 Cheap v alue, high EPS rev 's (mean) Ex p. v alue, low EPS rev 's (mean) Cheap v alue, high EPS rev 's (median) Ex p. v alue, low EPS rev 's (median)
Chart 25: Cheap value, high EPS revisions - expensive value, low EPS revisions
3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% Days Cheap v alue, high EPS rev 's - ex p. v alue, low EPS rev 's (mean) Cheap v alue, high EPS rev 's - ex p. v alue, low EPS rev 's (median)
Days

Cheap value, high EPS rev's 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 -0.2% 7.6% -0.4% 4.7% -1.3% 0.4% -0.1% -0.6% 3.6% 6.6% 3.0% Expensive value, low EPS rev's -1.1% -3.9% 0.6% 0.2% 1.0% 1.0% -2.4% 1.1% -2.4% 1.6% -2.5% Cheap value, high EPS rev's Expensive value, low EPS rev's 0.9% 11.6% -1.1% 4.5% -2.3% -0.6% 2.3% -1.6% 6.0% 4.9% 5.5%
Chart 26: Cheap value, high EPS rev's expensive value, low EPS rev's
14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
UBS 27
-20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20
Understanding the mean reversion trade

It is often tempting (particularly for value managers) as we approach reporting season to buy stocks that appear too cheap. However, given the correlation between earnings and multiples, retractions in earnings often lead to greater than expected retraction in prices. As a consequence, it is important when buying value prior to reporting season to ensure that the prices are underpinned by earnings. We assess the performance of cheap value companies with high and low earnings revisions in order to demonstrate the difference in performance between cheap value companies with improving earnings, versus cheap value companies with deteriorating earnings outlooks. Overall, we find that cheap stocks with high earnings revisions outperform cheap stocks with low earnings revisions by an average of 1.9% over the ten day window (5 days prior to five days post) around the reporting date.
Chart 27: Cheap value, high EPS revs & cheap value, low EPS revs
2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5%
-20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20
Chart 28: Cheap value, high EPS revs - cheap value, low EPS revs
2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 Days
Cheap v alue, high EPS rev 's (mean) Cheap v alue, low EPS rev 's (mean) Cheap v alue, high EPS rev 's (median) Cheap v alue, low EPS rev 's (median)
Days
Cheap v alue & high EPS rev s-cheap v alue & low EPS rev s (mean) Cheap v alue & high EPS rev s-cheap v alue & low EPS rev s (median)
UBS 28
Performance
All three intersections performed well, however, whilst the performance of FSQ with Value is clearly the best on a long/short basis, 70% of the return is derived from the short side. On a long-only basis, the best performing strategy remains Value with Earnings Revisions. However, we note that the strategy has only been profitable in 6 of the past eleven years.
Table 9: Performance
Return Financial Statement Quality high low high - low 1.8% -1.1% 2.9% Hit rate 57% 54% 56%
Value
cheap expensive Cheap - expensive
1.6% -0.4% 1.9%
56% 51% 53%
Earnings Revisions
high low high - low
1.5% 0.1% 1.3%
55% 49% 52%
Financial Statement Quality & Value
high low high - low
2.1% -4.7% 6.8%
61% 67% 63%
Financial Statement Quality & Earnings Revisions
high low high - low
1.5% -2.0% 3.4%
55% 55% 55%
Value & Earnings Revisions
high low high - low
2.5% -0.7% 3.1%
63% 50% 56%
UBS 29
Chart 29: Performance of strategies through reporting dates

6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 Days
High - Low FSQ & Value (mean) High - Low FSQ & EPS rev isions (mean) High - Low Value & EPS rev isions (mean) 20
UBS 30
Chart 30: Outliers on the FSQ and Value metrics

1 2 3 4 Value (decile) 5 6 7 8 9 10 1 AQA 2 3 TPI TEN 4 5 6 Financial Statement Quality 7 8 9 Least preferred SEK SWM
Cheap
PRY Mos t preferred BLY SIP DUE FLT DXS WPL DOW AGK SHL CRZ
Improving
Table 10: How stocks rank on Financial Statement Quality, Value and Earnings Revisions
Ticker Company Sector FSQ Score (score 9 is highest) SuperValue decile (decile 1 is cheap) Earnings Revisions (decile 1 is high)
Most preferred FLT PRY SHL DXS DUE SIP AGK BLY CRZ Flight Centre Ltd. Primary Health Care Ltd. Sonic Healthcare Ltd. Dexus Property Group DUET Group Sigma Pharmaceuticals Ltd. AGL Energy Ltd. Boart Longyear Ltd. carsales.com Ltd. Consumer Discretionary Health Care Health Care Property Trusts Utilities Health Care Utilities Industrials Information Technology 7 6 8 7 7 7 8 7 9 4 1 3 4 3 2 3 2 4 2 5 3 3 2 3 3 3 3
Least preferred DOW TEN SWM WPL SEK TPI AQA Downer EDI Ltd. Ten Network Holdings Ltd. Seven West Media Ltd. Woodside Petroleum Ltd. SEEK Ltd. Transpacific Industries Group Ltd. Aquila Resources Ltd. Industrials Consumer Discretionary Consumer Discretionary Energy Industrials Industrials Energy 5 4 4 5 4 4 2 7 10 7 6 6 10 10 6 9 7 7 6 10 10
UBS 31
What else works?

As we noted in our piece Companies that will pay in 2012 (published 2011-1202), in a world of slower growth dividends will matter. Globally growth rates have been revised downwards, with the US now forecast to grow real GDP by 2%, Europe to contract by 0.7%, and China to grow at 8%. In Australia, we are expecting real GDP to come in at 3.3% for 2012, which in terms of corporate earnings translates to broad market earnings growth of 5.9%. In a world of slow growth income makes up a larger proportion of total returns. During the previous de-levering phase of 1929 to 1945 the Australian market delivered an average annual price appreciation of 3.2% per annum and a total return of 9.3%. In other words, 6.1% or around two thirds of the total return came from dividends. Almost half the market pays a fully franked dividend (92 companies within the ASX200) and a further 22 pay a partially franked dividend. With a dividend yield of 4.9% and an average level of franking across the market of 71%, the market is currently paying 148 bps in franking alone. As a consequence focussing on companies with fully franked dividends provides investors with a free kick. We have trawled the balance sheets of the ASX 200 for franking balances and scaled them by total equity to give us an idea of which companies might pay a special dividend or do an off-market buyback. Below is a list of companies which we believe will complete some form of capital management over the next 12 months.
UBS 32
Table 11: Companies that are likely to perform capital management in 2012
Code AMC ANN CGF CPA CQR CRZ CSL FLT GNC GPT HVN ILU IOF JBH JHX OZL RIO SGM SGP SIP SMX SUN SXL TLS Company Amcor Limited Ansell Challenger Limited Commonwealth Prop Charter Hall Retail Carsales.Com Ltd CSL Limited Flight Centre GrainCorp Limited GPT Group Harvey Norman Iluka Resources Investa Office Fund JB Hi-Fi Limited James Hardie Indust OZ Minerals Rio Tinto Limited Sims Metal Mgmt Ltd Stockland Sigma Pharmaceuticals SMS Management. Suncorp Group Ltd Sthn Cross Media Telstra Corporation. Potential capital management action On market buyback On market buyback On market buyback Off market buyback On market buyback On market buyback On market buyback Special dividend Special dividend On market buyback Off market buyback Off-market buyback or special div On market buyback Off market buyback Buyback On market buyback Buyback On market buyback On market buyback On market buyback Off market buyback Off-market buyback or special div On market buyback On market buyback
UBS 33
Conclusion
Both the level of earnings growth and earnings revisions point to a two speed reporting season with resource services, general industrials, and healthcare faring better than the consumer related sectors and financials. We find that financial statement quality, value and earnings revisions drive outperformance through reporting season. Importantly, we find that financial statement quality combined with value provides the greatest outperformance in a long-short model, whilst value combined with earnings revisions provides the greatest outperformance on the long side. In a world of slower growth dividends will matter. With many Australian companies currently carrying excess cash and franking credits on their balance sheets, we find that focussing on companies with fully franked dividends provides investors with a free kick.
Statement of Risk Our quantitative models rely on reported financial statement information, consensus earnings forecasts and stock prices. Errors in these numbers are sometimes impossible to prevent (as when an item is misstated by a company). Also, the models employ historical data to estimate the efficacy of stock selection strategies and the relationships among strategies, which may change in the future. Additionally, unusual company-specific events could overwhelm the systematic influence of the strategies used to rank and score stocks.
UBS 34
ab
UBS Investment Research Boral Limited
Sells Indonesian concrete
Sale for US$135m compared to US$14m EBITDA The transaction is in line with the previously announced strategy and represents a multiple of 9.6x historic EBITDA. UBS 2012 EBITDA estimate for this business was lower. The transaction is expected to close prior to June 30 2012. Proceeds will be used to reduce UBSe consolidated net debt ~A$1.5bn. Book profit on the sale is $35m. FY12 interim previewed at $65-$70 This interim will exclude any property earnings and includes an estimated $10m variance on the Galong lime plant which is now closed. Estimates reduced ~4% FY12 and FY13 Our new estimates reflect lower Asian concrete earnings than previously modelled and risk associated with a H2 hockey stick. Valuation price target is unchanged at $5.03 The Indonesian concrete sale increases our confidence in the BLD price target. Although the market PE has moved up from 12.6 to 12.9 this year we leave our price target unchanged.

Australia Building Materials 12-month rating 12m price target Price
Buy
Unchanged
A$5.03/US$21.42 Unchanged A$4.04/US$17.89 (ADR)
RIC: BLD.AX BBG: BLD AU
1 February 2012
Trading data (local/US$) 52-wk range Market cap. Shares o/s ADR ratio Free float Avg. daily volume ('000) Avg. daily value (m) Balance sheet data 06/12E Shareholders' equity P/BV (UBS) Net Cash (debt) Forecast returns Forecast price appreciation Forecast dividend yield Forecast stock return Market return assumption Forecast excess return EPS (UBS, A$) From 0.103 0.126 0.232 0.299 06/12E To 0.090 0.131 0.223 0.285 Cons. 0.238 0.322 06/11 Actual 0.137 0.115 +24.5% 5.1% +29.6% 8.6% +21.0% A$3.27bn 0.9x (A$1.33bn) A$5.59-3.15/US$22.70-12.33 A$2.95bn/US$3.26bn 730m (ORD)/182m (ADR) 1 ADR:4 ORD 100% 3,599/1 A$13.4/US$0.0
Highlights (A$m) Revenues EBIT (UBS) Net Income (UBS) EPS (UBS, A$) Net DPS (UBS, A$) Profitability & Valuation EBIT margin % ROIC (EBIT) % EV/EBITDA (core) x PE (UBS) x Net dividend yield %
06/10 4,599 252 132 0.221 0.135 5-yr hist av. 7.3 9.7 8.2 18.8 3.6
06/11 4,711 277 175 0.242 0.145 06/11 5.9 8.0 8.1 19.4 3.1
06/12E 4,849 297 166 0.223 0.130 06/12E 6.1 7.6 7.4 18.1 3.2
06/13E 5,343 403 221 0.285 0.160 06/13E 7.5 8.8 7.0 14.2 4.0
06/14E 5,904 532 306 0.385 0.220 06/14E 9.0 10.9 5.7 10.5 5.4
H1E H2E 06/12E 06/13E
Performance (A$)
7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 01/09 04/09 07/09 10/09 01/10 04/10 07/10 10/10 01/11 04/11 07/11 10/11 01/12 Stock Price (A$) Rel. All Ordinaries 120 100 80 60 40 20 0
Price Target (A$) (LHS) Rel. All Ordinaries (RHS)
Stock Price (A$) (LHS)
Source: Company accounts, Thomson Reuters, UBS estimates. (UBS) valuations are stated before goodwill, exceptionals and other special items. Valuations: based on an average share price that year, (E): based on a share price of A$4.04 on 31 Jan 2012 23:37 EST
Source: UBS
David Leitch
Analyst david.leitch@ubs.com +61-2-9324 3870
Hannah Dent
Analyst hannah.dent@ubs.com +61-2-9324 2665
Boral Limited 1 February 2012
Indonesian concrete sale keeps strategy on track

In FY11 BLD bought business with sound medium term prospects, but was perceived by the market as having paid a high price. The acquisition of the LBGA minorities was at an estimated 13x pro-forma one year ahead EBITDA. The $236m (excluding adjustments) price for the combined Wagners and Sunshine Coast concrete and quarry acquisitions in Qld was at an estimated 8.1x FY11 EBITDA. In this context, the sale of the Indonesian concrete business (which was strategically hampered by its lack of vertical integration) achieved a 9.6x FY11 EBITDA multiple. FY11 earnings were boosted by the margins on a contract for supply of concrete to a dam project which was not expected to recur in FY12. Near term we expect the transaction to be approximately EPS neutral. Clearly the Indonesian business with its No 1 position in the large Indonesian concrete market and long track record is more valuable than the Thai business which remains unsold. Boral bought the Thai business for US$45 m in 2004 at a trailing EBITDA multiple of 7x. In 2010 the book value was written down by $17m. Capital expenditure and depreciation in the interim were not disclosed, but our estimate of sale proceeds is about US$35m. Our valuation of the combined Indonesian and as yet unsold Thai business is therefore $165 m.
Pro-forma balance sheet and metrics

Our estimate of FY12 Net debt was $1.33bn before the announcement of this sale. However exchange rate movements, transaction timing, operational cash flow and capex timing lend some uncertainty to that estimate and we estimate that net debt could be as much as $1.5bn. Estimated FY12 net debt:ebitda is 2.5x which we believe is consistent with BLDs ongoing requirements. EBIT:net interest is around 4.0x. We compare before and after safety metrics as follows:
Table 1: BLD FY12 safety metrics
$m EBITDA EBIT Net interest Net debt Net debt: Ebitda Ebit:Net interest Source: UBSe Previous 543 320 (81) 1,332 2.5 4.0 Pro-forma 533 311 (72) 1,204 2.3 4.3
UBS 36
Estimates reduced 4%
We have reduced estimates to reflect: 1. Reduced underlying estimates from Asian concrete based on information disclosed today. 2. The head wind that a weak H1 one, the seasonally stronger half, represents for the full year. BLD announced that FY12 interim NPAT before significant items is expected to be in the range of $65-$70 m before significant items. No property earnings are expected in H1. Excluding property, BLDs earnings have historically had a H1 seasonal bias with H2 containing the traditional January and Easter slow downs, and in latter years the January wet weather has also started to impact. Overall, H1 earnings since 2001 have represented 53% of the full year earnings and excluding property H1 has averaged 59% of FY. Based on seasonality alone we would estimate BLD to report ~$140m FY12 NPAT including property if it reported $67m in H1. In FY12 we anticipate a stronger H2 relative to H1 because: 1. Property earnings: We continue to assume $25 m pre-tax in H2. There is clearly a risk that some of this could sink into H2. 2. Some reduction in USA losses in H2. We look only for a marginal benefit. 3. Ongoing benefit of higher concrete prices and importantly we anticipate the Curtis Island concrete volumes to flow predominantly in this half. 4. H1 Galong losses, potentially as high as $5m in H1 will be absent. 5. In H1 Berrima cement works had a maintenance shut down. Although we are forecasting BLD estimates treating Indonesian concrete as a discontinued business, but still included in consensus and assuming it is there for a full 12 months, we are nevertheless reducing our estimate of the contribution from Asian construction materials to $10m from a prior estimate of $18m. We believe the Thai business is basically a break even EBIT and that Indonesian concrete will be below last years now reported $14 m.
UBS 37
Estimate revisions
Table 2: Changes to estimates

New Year to Jun 2012 NPAT A$ m EPS A$ cents DPS A$ cents Year to Jun 2013 NPAT A$ m EPS A$ cents DPS A$ cents Year to Jun 2014 NPAT A$ m EPS A$ cents DPS A$ cents Source: UBSe 306 38.5 22.0 314 39.4 22.0 (2%) (2%) 0% 221 28.5 16.0 231 29.9 17.0 (5%) (4%) (6%) 166 22.3 13.0 172 23.2 13.0 (4%) (4%) 0% Previous Change
Table 3: Earnings estimates

MARKET INFORMATION
Rating Price (A$) Price target (A$) Shares outstanding (m) Market capitalisation ($m) Avg. daily turnover ($m) Year end Buy $4.04 $5.03 730 2,949 12 June
ENTERPRISE VALUE
A$m Market Cap Net debt Minorities Ent. Value. EV: Ebitda Net debt: EV. 2009 2,949 1,514 1 4,464 8.3 34% 2010 2,949 1,183 3 4,134 8.2 29% 2011 2012E 2013E 2014E 2,949 2,949 2,949 2,949 505 1,335 1,196 1,324 48 79 83 89 3,502 4,362 4,228 4,362 6.7 8.2 6.5 5.6 14% 31% 28% 30%
PROFIT AND LOSS

A$m Sales EBITDA 2009 2010 2011 2012E 2013E 2014E 4,875 4,599 4,711 4,849 5,343 5,904 539 505 522 532 645 784 (243) 221 25 246 79 64 (42) 7 63 (15) 403 (99) (79) 221 28.5 16.0 14.2 4.0 28% 12.1 26.0 6.3 4.1 (253) 237 25 262 90 84 33 8 70 (16) 532 (93) (126) 306 38.5 22.0 10.5 5.4 35% 13.3 28.8 8.4 5.7
BALANCE SHEET
A$m Cash Investments PPE Intangibles Other Total assets Debt Other liabilites Total liabilities Minorities Equity Total funding Net debt 2009 101 329 3,104 308 1,650 5,491 1,614 1,124 2,738 1 2,752 2,754 1,514 2009 539 (126) (47) (231) 246 (94) (53) (31) 0.9 2010 157 321 2,785 278 1,669 5,209 1,340 1,234 2,573 3 2,624 2,636 1,183 2010 505 (102) (12) (180) 45 (42) (57) 1 0.7 2011 2012E 2013E 2014E 561 150 279 280 248 248 248 248 2,895 256 1,708 5,668 1,067 1,445 2,512 48 3,109 3,156 505 3,670 456 1,758 6,282 1,485 1,466 2,951 79 3,273 3,331 1,335 3,694 456 2,223 6,899 1,474 1,615 3,090 83 3,491 3,810 1,196 3,928 456 2,406 7,318 1,604 1,785 3,389 89 3,657 3,929 1,324
Depreciation (263) (253) (245) (235) ACM ex QED 184 181 177 204 QED 47 20 28 25 Austn Construction 231 201 204 229 Cement division 108 88 96 79 Building Products 53 101 84 57 USA (109) (104) (99) (89) Construction related (3) (12) 8 7 Asian plasterboard 29 Unallocated EBIT Net interest Tax Net profit (adj) Per share EPS DPS Ratios PE Yield EPS growth Ebitda margin Tax rate ROE Ebit:Net interest (21) 276 (127) (17) 131 22.3 13.0 18.1 3.2 11.1 11.4 4.8 2.2 (22) 252 (97) (22) 132 22.1 13.5 18.3 3.3 -1% 11.0 14.2 5.0 2.6 (16) 277 (64) (40) 175 24.4 14.5 16.6 3.6 10% 11.1 18.8 5.6 4.3 (15) 297 (81) (49) 166 22.3 13.0 18.1 3.2 -8% 11.0 22.8 5.1 3.7
CASH FLOW
A$m EBITDA Net interest Taxpaid Capex Acquisitions Dividends Change in cash Equity issued Capex Depn 2011 2012E 2013E 2014E 522 532 645 784 (44) (81) (99) (93) (22) (49) (79) (126) (347) (312) (396) (388) (39) (899) 129 (98) (42) (2) (3) (140) (404) 411 (129) (2) 480 0 0 0 1.4 1.3 1.6 1.6
Source: UBSe
UBS 38
Boral Limited Boral Limited (BLD) has strong positions in domestic cement, flyash, quarrying, concrete and asphalt, bricks, plasterboard, windows and roof tiles. In the US it operates in bricks, roof tiles and flyash and in Asia its plasterboard joint venture (50% with Lafarge) is the largest producer in the region. BLD has over 100 quarries in Australia and looks well positioned for quarry end-use activities, with three former quarries in the process of residential land sub-division.
Statement of Risk Boral operates in cyclical industries, has a significant degree of fixed costs and it faces low barriers to entry. As a result, profits are cyclical and volatile.
UBS 39
ab
UBS Investment Research Ansell Limited
No COGS relief for ANN in FY12
FY12 latex price in line with FY11 despite 2H fall. Synthetics still up At current spot rate for balance of ANN FY12 manufacturing period, average latex prices for FY12 will be MYR822 per tonne almost exactly the same as MYR824 per tonne in FY11. However we note that price is already increasing into the wintering period and is likely to push prices higher still before the period closes resulting in very modest cost headwind vs pcp. Butadiene prices (key component of synthetic rubber products) were up 104% on pcp in 1H and 50% 2H to date. Half year price variation will impact seasonality Despite flat price year on year, half year latex prices have created large cost disparities. 1HFY12 latex price was up 29% on pcp while 2HFY12 price was down 23% on pcp. The 1H headwind and 2H tailwind creates a reverse seasonality in UBSe of 49/51. This will be most evident in medical and new vertical segments. Net impact modest cost headwind captured in guidance but no upside Lower second half latex prices should not be confused as significant upside to the ANN cost base. ANN affirmed guidance at AGM in Oct 11 noting that latex costs has eased since guidance was set in Aug 11 but noted that synthetics costs had offset. The situation has changed little since that time end of period latex price into wintering period may impact vary outcomes marginally either way. We note that a constant rubber price is a positive to ANN with some ability to offset through price increases short term volatility can create cost/price squeezes. Valuation: PT $11.64ps (unchanged) Sell PT uses NAV at market multiple + NPV tax loss at 77cps.

Australia Healthcare Providers 12-month rating 12m price target Price
RIC: ANN.AX BBG: ANN AU
Sell
Unchanged
A$11.64/US$12.39 Unchanged A$14.87/US$15.83
1 February 2012
Trading data (local/US$) 52-wk range Market cap. Shares o/s Free float Avg. daily volume ('000) Avg. daily value (m) Balance sheet data 06/12E Shareholders' equity P/BV (UBS) Net Cash (debt) Forecast returns Forecast price appreciation Forecast dividend yield Forecast stock return Market return assumption Forecast excess return EPS (UBS, A$) 06/12E H1E H2E 06/12E 06/13E UBS 0.42 0.43 0.84 0.93 Cons. 0.99 1.10 06/11 Actual 0.42 0.40 -21.7% 2.7% -19.0% 8.6% -27.6% US$0.71bn 2.9x (US$0.05bn) A$15.15-12.47/US$15.98-12.17 A$1.96bn/US$2.08bn 132m (ORD) 100% 466 A$6.8
Highlights (US$m) Revenues EBIT (UBS) Net Income (UBS) EPS (UBS, A$) Net DPS (UBS, A$) Profitability & Valuation EBIT margin % ROIC (EBIT) % EV/EBITDA (core) x PE (UBS) x Net dividend yield %
06/10 1,086 127 94 0.79 0.30 5-yr hist av. 10.7 18.9 10.5 15.4 2.6
06/11 1,207 137 108 0.82 0.35 06/11 11.3 21.0 11.3 16.3 2.6
06/12E 1,294 150 114 0.84 0.37 06/12E 11.6 20.2 12.0 17.7 2.5
06/13E 1,428 164 125 0.93 0.43 06/13E 11.5 20.6 11.1 16.0 2.9
06/14E 1,521 178 140 1.04 0.48 06/14E 11.7 21.9 10.0 14.3 3.2
Performance (A$)
16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 Stock Price (A$) Rel. All Ordinaries 120 100 80 60 40 20
0/0 19
0/0 49
0/0 79
1/0 09
0/1 10
0/1 40
0/1 70
1/1 00
0/1 11
0/1 41
0/1 71
1/1 01
Source: UBS
Andrew Goodsall
Analyst andrew.goodsall@ubs.com +61-2-9324 3574
Dan Hurren
Analyst dan.hurren@ubs.com +61-2-9324 3575
0/1 12
Ansell Limited 1 February 2012
Table 1: Ansell Ltd (ANN.AX) - Financial snapshot

Year End 30 Jun
Core PE PE Rel (All Ind. ex. Financials & PT) Ent. Value/EBITDA Ent. Value/EBITA Yield Franking P/Book Value x x x x % % x US$m % US$m US$m % US$m US$m % US$m US$m % US$m US$m US$m % US$m US$m US$m US$m US$m US$m US$m m US % US % US % US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m % % x % x % US$ US$
2010A
18.8 1.44 12.0 13.9 2.0% 0% 2.66
2011A
18.0 1.39 12.1 13.8 2.4% 0% 2.04
2012E
17.7 1.46 11.9 13.9 2.5% 0% 1.99
2013E
15.7 1.42 10.6 12.3 2.9% 0% 1.77
2014E
14.0 10.2 11.7 3.2% 0% 1.61
Andrew Goodsall (612) 9324 3574 Dan Hurren (612) 9324 3575
Stock information
Recommendation Share Price (A$) Shares on issue (m) Market capitalisation (A$m) Sell $14.87 130.5 $1,940.7
Profit & Loss Statement

Sales revenue . . . change pcp Estimate R&D Capitalised EBITDA . . . EBITDA margin Depreciation & other amortisation EBITA . . . EBITA margin Goodwill & Tang. Asset Impairment EBIT . . . EBIT margin Net interest expense PBT Tax expense
...Rptd rate historic / cash rate forecast
2010A
1,086.1 8.3% 147.2 13.6% (20.0) 127.2 11.7% 127.2 11.7% (8.5) 118.7 (9.6) 8.1% (2.9) 106.2 106.2 (11.8) 94.4
2011A
1,206.9 11.1% 155.9 12.9% (19.0) 136.9 11.3% 136.9 11.3% (4.0) 132.9 (8.1) 6.1% (3.1) 121.7 121.7 (13.7) 108.0
2012E
1,294.3 7.2% 174.6 13.5% (24.7) 149.9 11.6% 149.9 11.6% (8.6) 141.3 (24.7) 17.5% (2.6) 114.0 114.0 114.0
2013E
1,427.9 10.3% 189.5 13.3% (26.0) 163.5 11.5% 163.5 11.5% (9.0) 154.5 (27.0) 17.5% (2.6) 124.9 124.9 124.9
2014E
1,520.6 6.5% 204.4 13.4% (26.5) 177.9 11.7% 177.9 11.7% (4.9) 172.9 (30.3) 17.5% (2.6) 140.1 140.1 140.1
H1-11A
583.6 9.4% 80.0 13.7% (10.8) 69.2 11.9% 69.2 11.9% (2.2) 67.0 (4.2) 6.3% (1.8) 61.0 61.0 (7.9) 53.1
H2-11A
623.3 12.7% 75.9 12.2% (8.2) 67.7 10.9% 67.7 10.9% (1.8) 65.9 (3.9) 5.9% (1.3) 60.7 60.7 (5.8) 54.9
H1-12E
635.1 8.8% 85.6 13.5% (12.0) 73.6 11.6% 73.6 11.6% (3.7) 69.9 (12.2) 17.5% (1.3) 56.4 56.4 56.4
H2-12E
659.2 5.8% 89.0 13.5% (12.7) 76.3 11.6% 76.3 11.6% (4.9) 71.4 (12.5) 17.5% (1.3) 57.6 57.6 57.6
H1-13E
693.9 9.3% 92.9 13.4% (13.0) 79.9 11.5% 79.9 11.5% (4.9) 75.0 (13.1) 17.5% (1.3) 60.5 60.5 60.5
H2-13E
734.0 11.3% 96.7 13.2% (13.0) 83.6 11.4% 83.6 11.4% (4.1) 79.5 (13.9) 17.5% (1.3) 64.3 64.3 64.3
Minorities Reported Net Profit (pre abn) Abnormals (after tax) Total NPAT post abnormals Goodwill & Tang. Asset Impairment Non-recurring items & other IFRS adj Core net profit
Per Share Data

Ave. diluted shares outstanding Reported EPS (fully diluted) . . . growth pcp Core EPS (fully diluted) . . . growth DPS . . . dividend payout
2010A
135.2 78.6 20.2% 69.8 20% 26.5 38%
2011A
132.9 91.6 16.6% 81.3 16% 34.5 42%
2012E
130.5 87.3 -4.7% 87.3 7% 38.8 44%
2013E
128.0 97.5 11.7% 97.5 12% 43.9 45%
2014E
128.0 109.4 12.2% 109.4 12% 49.2 45%
H1-11A
132.8 45.9 15.0% 40.0 12.4% 14.2 36%
H2-11A
132.9 45.7 18.3% 41.3 20.5% 20.3 49%
H1-12E
131.8 42.8 -6.8% 42.8 7.0% 19.0 44%
H2-12E
129.3 44.5 -2.5% 44.5 7.8% 19.8 44%
H1-13E
128.0 47.3 10.5% 47.3 10.5% 21.3 45%
H2-13E
128.0 50.3 12.8% 50.3 12.8% 22.6 45%
Balance Sheet
Cash & Deposits Investments Inventories Debtors Other assets Property, Plant & Equipment Intangibles Total Assets Creditors Borrowings Provisions / other Total Liabilities Shareholders' Funds
Year End 30 Jun
2010A
200 178 165 115 140 305 1,102 154 249 135 538 565
2011A
259 198 193 137 150 362 1,298 179 243 154 575 723
2012E
250 211 194 137 182 369 1,342 174 302 136 612 730
2013E
250 235 216 137 186 369 1,392 195 255 141 591 801
2014E
250 250 229 137 190 369 1,425 207 191 146 544 881
Summary
Revenue US$m Industry Industrial Medical Sexual health & well being New Verticals Total Consolidated Growth pcp Regions Asia Pacific North America Europe Latin America EBITA US$m Industry Industrial Medical Sexual health & well being New Verticals Unallocated Items Total Consolidated Growth pcp EBITA margins Industry Industrial Medical Sexual health & well being New Verticals Total (pre-unallocated) Total Consolidated
2011A
471.6 359.2 200.6 175.5 1,206.9
2012E
525.9 375.6 207.2 185.6 1,294.3
2013E
598.2 406.3 224.0 199.4 1,427.9
0.38794
Cashflow Statement
EBITDA Working capital Net Interest Tax paid Other Operating CF Capital expenditure Asset sales Acquisitions/equity investment Other Investing CF New equity issues Dividends paid Other Financing CF Change in net cash (debt)
2010A
147 (2) (9) (10) 127 (28) (15) 2 (41) (37) (116) (153) (67)
2011A
156 (23) (4) (8) 121 (45) 2 (43) 4 (42) (23) (61) 17
2012E
175 (18) (9) (25) 123 (64) (64) (69) (65) 59 (75) (15)
2013E
190 (25) (9) (27) 128 (30) (30) (53) (47) (100) (1)
2014E
204 (17) (5) (30) 152 (30) (30) (60) (64) (124) (2)
0.33 235.6 468.2 403.9 76.5
259.0 549.1 404.3 81.9
281.8 597.5 459.4 89.1
81.9 39.2 21.9 2.5 (8.6) 136.9 7.6%
96.5 35.9 25.2 5.6 (13.3) 149.9 9.5%
108.6 39.8 25.8 3.8 (14.4) 163.5 9.1%
PERFORMANCE RATIOS
ROE (Core) ROI Capex / Depreciation Working capital / Sales ratio Net Interest Cover Net Debt / Equity NTA ps Book Value ps
2010A
16.7% 20.7% 1.4 17.4% 14.9 8.7% 1.92 4.64
2011A
14.9% 19.4% 2.3 17.6% 34.3 N/A 2.72 5.41
2012E
15.6% 19.2% 2.6 17.8% 17.4 7.1% 2.77 5.26
2013E
15.6% 20.3% 1.2 17.9% 18.2 0.6% 3.38 5.91
2014E
15.9% 21.6% 1.1 17.9% 36.0 N/A 4.00 6.50
17.4% 10.9% 10.9% 1.4% 12.1% 11.3%
18.3% 9.6% 12.2% 3.0% 12.4% 11.6%
18.2% 9.8% 11.5% 1.9% 12.5% 11.5%
Source: Company reports, UBSe
UBS 41
Latex and synthetic rubber costs

Average latex price for FY12 is almost identical to that of FY11 (as per the ANN manufacturing period of Apr to Mar). High prices in late FY11 were matched in early FY12.
Chart 1: Latex prices FY11 vs FY12
1,100 1,000 900 800 700 600 Dec-10 Aug-10 Aug-11 Dec-11
5-Feb FY12 averages
Oct-10
Jun-10
Jun-11
Oct-11
FY11 Actual Price

Source: Company reports, UBSe
FY12 Actual Price
Feb-11
FY11 Average
FY12 Average
However the extreme movements seen in both FY11 and FY12 will create distinct seasonality in the latex exposed business segments largely new verticals and medical.
Chart 2: Latex price FY12 over FY11
1200
1000
800
600
400
200
0 1-Apr
2-May
2-Jun FY11 actual
3-Jul
3-Aug FY11 averages
3-Sep
4-Oct
4-Nov
5-Dec
5-Jan
7-Mar
FY12 actual (ytd)
FY12 scenario (spot price)
Source: Bloomberg, UBSe
Feb-12
Apr-10
Apr-11
UBS 42
Chart 3: Latex price and averages as per ANN manufacturing period (half years)
1200 1100 1000 900 800 700 600 500 400 300
-M ar -0 -Ju 6 n30 06 -S ep 31 -06 -D ec 31 -06 -M ar 30 -07 -Ju n 30 -07 -S ep 31 -07 -D ec 31 -07 -M ar 30 -08 -Ju n 30 -08 -S ep 31 -08 -D ec 31 -08 -M a 30 r-09 -Ju n 30 -09 -S ep 31 -09 -D ec 31 -09 -M ar 30 -10 -Ju n 30 -10 -S ep 31 -10 -D ec 31 -10 -M ar 30 -11 -Ju n 30 -11 -S ep 31 -11 -D ec -1 1 30
1HFY07 2HFY07 1HFY08 2HFY08 1HFY09 2HFY09 1HFY10 2HFY10 1HFY11 2HFY11 1HFY12
31
Malaysian Wet Latex Price
Period average
Source: Bloomberg, UBS
The long run data shows that latex prices appear to have rebased at a higher level following a period of stagnation during FY08 to FY10. This is line with our longer term outlook on latex prices. Key impacts are: Ongoing high levels of demand, particularly out of China. Ongoing trend toward other cash crops beside rubber trees in key rubber growing areas (largely palm oil) Disruption to renewal planting cycle that occurred in 2007/08 where farmers appeared to leave marginal trees in the ground to make the most of high prices.
Chart 4: Long term latex price movement (MYR/t) as per ANN FY
(MYR/t) 1100 1000 900 800 700 600 500 400 300 200
4 -0 Ap r
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
-0
-1
-0
-0
-0
-0
Ap r
Ap r
Ap r
Ap r
Ap r
Ap r
Ap r
-1
UBS 43
Chart 5: Latex price and averages as per ANN manufacturing period (half years)
1200 1100 1000 900 800 700 600 500 400 300
-M ar -0 -Ju 6 n30 06 -S ep 31 -06 -D ec 31 -06 -M ar 30 -07 -Ju n 30 -07 -S ep 31 -07 -D ec 31 -07 -M ar 30 -08 -Ju n 30 -08 -S ep 31 -08 -D ec 31 -08 -M a 30 r-09 -Ju n 30 -09 -S ep 31 -09 -D ec 31 -09 -M ar 30 -10 -Ju n 30 -10 -S ep 31 -10 -D ec 31 -10 -M ar 30 -11 -Ju n 30 -11 -S ep 31 -11 -D ec -1 1 30
31
Malaysian Wet Latex Price
Period average
Any relief that ANN has seen from lower 2H latex prices vs pcp have been at eroded by the increases in Butadiene, a key component of synthetic rubber. Prices rose consistently from early CY09 and fell only marginally in late CY10. As ANN has moved to reduce latex exposure when prices were high, they have increased reliance on synthetics.
Chart 6: Butadiene price and averages as per ANN manufacturing period (half years)
200 175 150 125 100 75 50 25 0
-M ar 30 -06 -Ju n 30 -06 -S ep 31 -06 -D ec 31 -06 -M ar 30 -07 -Ju n 30 -07 -S ep 31 -07 -D ec 31 -07 -M ar 30 -08 -Ju n 30 -08 -S ep 31 -08 -D ec 31 -08 -M a 30 r-09 -Ju n 30 -09 -S ep 31 -09 -D ec 31 -09 -M ar 30 -10 -Ju n 30 -10 -S ep 31 -10 -D ec 31 -10 -M ar 30 -11 -Ju n 30 -11 -S ep 31 -11 -D ec -1 1
31
Butadiene
Period average
UBS 44
Ansell Limited (ANN.AX)

MARKET INFORMATION
Rating: Price (as of 31-Jan-12): (A$) Price Target (12 months): (A$) Shares outstanding: (m) Market Capital (US$ m): Avg. daily turnover (US$ m): Year end: Website: Major Shareholders: Sell 14.87 11.64 131.6 2,076.1 7.0 June www.ansell.com.au 2011 122 108 0.93 0.82 4.0 16.3 0.35 42 2.8 131.6 5.02 2.7 3.3 0 2011 1,207 156 (19) 137 (4) 0 0 133 (8) (3) 0 108 14 122 2011 259 193 198 150 467 2 30 1,298 179 243 154 0 575 15 709 1,298 16 2012E 114 114 0.85 0.84 2.0 17.7 0.37 44 2.5 131.6 5.20 2.9 3.1 0 2012E 1,294 175 (25) 150 (9) 0 0 141 (25) (3) 0 114 0 114 2012E 250 194 211 182 473 2 30 1,342 174 302 136 0 612 17 713 1,342 (52) 2013E 125 125 0.93 0.93 10.5 16.0 0.43 46 2.9 131.6 5.81 2.6 5.3 0 2013E 1,428 190 (26) 164 (9) 0 0 155 (27) (3) 0 125 0 125 2013E 250 216 235 186 473 2 30 1,392 195 255 141 0 591 20 782 1,392 (5) 2014E 140 140 1.04 1.04 12.2 14.3 0.48 46 3.2 131.6 6.39 2.3 6.7 0 2014E 1,521 204 (27) 178 (5) 0 0 173 (30) (3) 0 140 0 140 2014E 250 229 250 190 473 2 30 1,425 207 191 146 0 544 22 859 1,425 59
COMPANY DESCRIPTION
ANN is a leading industrial and medical glove manufacturer, and the second largest global player in condoms. ANN's sales are in the US (c47%) Europe (37%) PROFILEand Asia Pacific (c16%). Production is carried out mainly in the developing world, with some facilities in the Americas and Eastern Europe and c20% of product supplied through external manufacturers. ANN operate three segments: occupational (work gloves), professional (surgical gloves, etc) and consumer (condoms, etc). In FY06, ANN set out to expand through M&A activity, which has delivered one major acquisition to date - the Polish condom manufacturer Unimil.
INVESTMENT SUMMARY
(US$ m) Net profit [reported] Net profit [adjusted] EPS [reported] (A$) EPS [adjusted, diluted] (A$) EPS Growth (%) PER [adjusted]* (x) Dividend (A$) Payout ratio, [EPS adj.] (%) Dividend Yield [Net]* (%) Shares [period-avg, basic] (m) Book value per share Price to Book* (x) Equity Free Cash Flow Yield (%) Franking (%)
KEY RATIOS
2011 Profitability (%) Revenue growth EBITDA margin EBIT margin Effective tax rate Return on Inv Cap (post-tax) Return on Equity Capital Structure Net Debt / EBITDA (x) Net Debt / Common equity (%) Net Debt / Core EV* (x) Capex / Depreciation (x) EBIT / Net Interest (x) (US$ m) Revenue EBITDA [adjusted] Depreciation & Amortisation EBIT [adjusted] Net interest Income from associates Other non-operating items Profit before tax [adj] Tax on pre-abnormal profit Minority Interests Dividends (preferred) Net Profit [adjusted] Abnormal Gain/(Loss) after Tax Net Profit [reported] 11.1 12.9 11.3 6.1 19.8 17.1
2012E 7.2 13.5 11.6 17.5 16.6 16.0
2013E 10.3 13.3 11.5 17.5 17.0 16.7
2014E 6.5 13.4 11.7 17.5 18.1 17.1
0.1 (2.2) (0.0) 2.3 >30 1H 11 584 80 (11) 69 (2) 0 0 67 (4) (2) 0 53 8 61 2011 1,745 17 0 3 0 1,765 (2) 1,763 1.5 11.3 12.9 12.4 2.7 2011 1,207 472 359 201 175 137 77 37 21 2
0.1 7.1 0.0 2.6 17.4 2H 11 623 76 (8) 68 (2) 0 0 66 (4) (1) 0 55 6 61 2012E 2,076 18 0 3 0 2,097 (2) 2,095 1.6 12.0 14.0 13.5 2.8 2012E 1,294 526 376 207 186 150 89 33 23 5
0.2 0.6 0.0 1.2 18.2 1H 12E 635 86 (12) 74 (4) 0 0 70 (12) (1) 0 56 0 56 2013E 2,076 28 0 3 0 2,108 (2) 2,106 1.5 11.1 12.9 11.7 2.7 2013E 1,428 598 406 224 199 164 100 37 24 3
0.1 (6.7) (0.0) 1.1 >30 2H 12E 659 89 (13) 76 (5) 0 0 71 (12) (1) 0 58 0 58 2014E 2,076 (27) 0 3 0 2,052 (2) 2,050 1.3 10.0 11.5 10.5 2.5 2014E 1,521 655 421 235 209 178 112 38 25 4
PROFIT AND LOSS

(US$ m) Revenue EBITDA [adjusted] Depreciation & Amortisation EBIT [adjusted] Net interest Income from associates Other non-operating items Profit before tax [adj] Tax on pre-abnormal profit Minority Interests Dividends (preferred) Net Profit [adjusted] Abnormal Gain/(Loss) after Tax Net Profit [reported]
PROFIT AND LOSS [HALF YEAR]
BALANCE SHEET
(US$ m) Cash & equivalents Accounts receivable Inventory Fixed assets Intangibles Investments Other assets Total Assets Accounts payable Short & long term debt Provisions & other Preferred securities Total liabs & pref shares Minorities Common equity Total liabilities & equity Net cash / (debt)
ENTERPRISE VALUE*
(US$ m) Market capital Net debt / (cash) [avg] Estimated share buy backs Minorities Pension provisions Total Enterprise Value (Non-core assets) Core Enterprise Value Core EV Ratios EV / Sales EV / EBITDA EV / EBIT EV / OpFCF [post-tax] EV / Invested Capital
DIVISIONAL BREAKDOWN
(US$ m) Total Revenue Occupational Healthcare Professional Healthcare Consumer Healthcare Adjustment EBIT Occupational Healthcare Professional Healthcare Consumer Healthcare Adjustment
CASH FLOW
(US$ m) Operating income [EBIT, UBS] Depreciation & Amortisation Net change in working capital Other (operating) Pre-tax op cash flow Interest (paid) / received Tax paid Other Operating cash flow Capital expenditure Free cash flow Net (acquisitions) / disposals Dividends paid (Common) Shares issued/(repurchased) 2011 137 19 (23) 0 133 (4) (14) 13 128 (43) 85 0 (42) 4 2012E 150 25 (18) 0 156 (9) (16) 0 131 (64) 68 0 (65) (69) 2013E 164 26 (25) 0 164 (9) (26) 0 130 (30) 100 0 (53) 0 2014E 178 27 (17) 0 187 (5) (29) 0 154 (30) 124 0 (60) 0
Source: UBS estimates, * Historical valuations are based on an average share price for the period. Current & future valuations are based on a share price of A$14.87 on 31-Jan-2012
UBS 45
Ansell Limited ANN is a leading industrial and medical glove manufacturer, and the second largest global player in condoms. ANN's sales are in the US (c47%) Europe (37%) and Asia Pacific (c16%). Production is carried out mainly in the developing world, with some facilities in the Americas and Eastern Europe and c20% of product supplied through external manufacturers. ANN operate three segments: occupational (work gloves), professional (surgical gloves, etc) and consumer (condoms, etc). In FY06, ANN set out to expand through M&A activity, which has delivered one major acquisition to date - the Polish condom manufacturer Unimil.
Statement of Risk ANN: We see the main risks to ANN as 1) movement in latex prices, particularly latex prices stabilizing at higher levels; 2) ANN reports in US$ and is at risk with EUR weakening against the USD (30% of sales are in Europe); 3) Weakness in the manufacturing sector can limit growth of the Occupational Healthcare business; 4) Key WHO contract risk for condoms; 5) FDA inspection risk can lead (and has led) to US import suspensions; and 6) higher AUD against the USD weakens AUD share price through translation of USD reported earnings.
UBS 46
ab
UBS Investment Research Goodman Fielder Limited
Results preview
H112 results 16 February 2012 GFF will report H112 results on Thursday 16 February. No guidance has been given but GFF has been clear that H1 results will be weak. We note the headwind from c14% higher fuel prices. GFF should reiterate $100m cost out by FY15 and improving H212 results from such cost out plus easing COGS (spot wheat, raw milk & palm oil 11-22% lower yoy). Current shelf prices suggest GFF should benefit from lower commodities but retailer and competitive environment are key. Corporate restructure GFF is undergoing significant change with 5 of its 7 executive management team in their roles for <7 months. Businesses with combined turnover of >$600m (c23% of group) are under consideration for sale & could deliver proceeds of $400m in our view. Exiting these underperformers is positive for sentiment, balance sheet & maybe even franking credits but we expect EPS dilution (sensitivities within). Maintain Neutral; need evidence of progress We expect new management to take time delivering its restructure, cost out & divestment program. Evidence of progress on each will drive the share price with the sale of Integro in particular a key catalyst we assume proceeds of $240m. Stock appears cheap on 7.7x FY13E PE with 9.4% dividend yield however its 35% PE discount to market is not far off its 6-year average discount of 30%. Valuation Our sum-of-the-parts based price target of $0.55 is trimmed from $0.57 as we roll forward to FY13E earnings.

Australia Food Products 12-month rating 12m price target Price
RIC: GFF.AX BBG: GFF AU
Neutral
Unchanged
A$0.55/US$0.59 Prior: A$0.57/US$0.61 A$0.53/US$0.56
1 February 2012
Trading data (local/US$) 52-wk range Market cap. Shares o/s Free float Avg. daily volume ('000) Avg. daily value (m) Balance sheet data 06/12E Shareholders' equity P/BV (UBS) Net Cash (debt) Forecast returns Forecast price appreciation Forecast dividend yield Forecast stock return Market return assumption Forecast excess return EPS (UBS, A$) From 06/12E To 0.04 0.04 0.07 0.08 Cons. 0.06 0.07 06/11 Actual 0.05 0.05 +4.8% 10.2% +15.0% 8.6% +6.4% A$1.58bn 0.7x (A$0.60bn) A$1.18-0.40/US$1.22-0.40 A$1.03bn/US$1.09bn 1,956m (ORD) 100% 6,750 A$3.3
06/10 2,660 346 184 0.12 0.10 5-yr hist av. 12.7 12.7 8.4 12.2 6.8
06/11 2,556 287 133 0.09 0.07 06/11 11.2 12.0 7.6 13.1 6.1
06/12E 2,514 257 127 0.07 0.05 06/12E 10.2 11.8 5.5 7.4 9.3
06/13E 2,577 278 159 0.08 0.05 06/13E 10.8 12.6 4.7 6.6 9.6
06/14E 2,649 290 171 0.09 0.06 06/14E 11.0 13.1 4.4 6.1 10.8
H1E H2E 06/12E 06/13E
Performance (A$)
1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 01/09 04/09 07/09 10/09 01/10 04/10 07/10 10/10 01/11 04/11 07/11 10/11 01/12 0.00 Stock Price (A$) Rel. All Ordinaries 140 120 100 80 60 40 20 0
Source: UBS
Lindy Newton, CFA

Analyst lindy.newton@ubs.com +61-2-9324 2172
Ben Gilbert
Analyst ben.gilbert@ubs.com +61-2-9324 2782
Paul Wong
Analyst paul-c.wong@ubs.com +61-2-9324 3493
Goodman Fielder Limited 1 February 2012
H112 results preview

GFF last updated the market at its strategy day on 17 November 2011. No FY12 guidance was provided but management made it clear that H1 results would be weak and H2 reliant on revenue improvement and operational efficiencies starting to impact. The company was optimistic about a H2 recovery, stating that: the business is beginning to stabilise due to the strengthening of fundamentals in Baking (prices, listings and market share) and the impact of cost savings programs enacted in Q112; we have early indications that the trends are beginning to turn more positively As such we look for any outlook commentary or FY12 guidance reiterating a stronger H2 result relative to H1. Our forecasts are summarised below.
FY12 outlook or guidance should emphasise an improved H2 result
UBS 48
Table 1: GFF financial summary

Financial summary (A$ m) Sales - Baking - Home Ingredients - Dairy - Asia Pacific - Integro EBITDA - Baking - Home Ingredients - Dairy - Asia Pacific - Integro - Overheads Dep'n & amort'n EBIT Net interest Tax Effective tax rate NPAT Outside equity interest Significant items WASO EPS (cents) DPS (cents) Payout ratio Net debt Source: UBS estimates; IRESS H111A 1,336.8 534.0 246.2 223.0 156.6 177.0 210.4 81.6 53.0 30.4 31.2 24.1 -9.9 -31.9 178.5 -47.3 -35.6 27.1% 95.6 -2.5 0.0 1,371.9 6.79 5.25 77% 836.4 H112E 1,270.6 502.0 236.4 202.3 156.6 173.5 152.7 49.3 44.8 24.0 30.9 22.0 -18.2 -33.4 119.3 -38.5 -22.6 28.0% 58.2 -2.6 -7.5 1,680.6 3.31 2.48 75% 619.2 -26.0% 22.5% -51.2% -52.7% -39.1% 2.5% Change -4.9% -6.0% -4.0% -9.3% 0.0% -2.0% -27.4% -39.6% -15.5% -21.1% -1.1% -8.6% 83.8% 4.6% -33.2% -18.7% -36.4% FY12E 2,514.1 1,002.8 472.8 402.7 302.2 333.6 320.0 114.3 90.3 49.6 59.1 39.9 -33.2 -72.5 247.5 -77.3 -47.6 28.0% 122.5 -5.5 -10.0 1,789.1 6.54 4.90 75% 598.0 6.35 4.95 78% 111.6 251.4 322.7 Consensus 2,525.5
Commodity prices easing benefit lags

Year-on-year GFFs commodity input costs are easing (spot yoy prices include wheat -22%; raw milk -11%; palm oil -22%; and canola -18%). GFF buys the majority of its annual wheat requirements from October to February each year coinciding with Australian crops and for Oils it typically hedges 3-6 months in advance. Raw milk is sourced from Fonterra at the spot rate (adjusted quarterly in arrears) and on pass-through contracts for the private label portion of GFFs business.
UBS 49
Chart 1: S&P GSCI Wheat spot price index

850 750 650 550 450 350 250 150 28-Nov-04 28-Nov-05 28-Nov-06 28-Nov-07 28-Nov-08 28-Nov-09 28-Nov-10 28-May-04 28-May-05 28-May-06 28-May-07 28-May-08 28-May-09 28-May-10 28-May-11 28-Nov-11
Chart 2: Canola ICE futures

800 700 600 500 400 300 200 100 0 2/01/2004 2/07/2004 2/01/2005 2/07/2005 2/01/2006 2/07/2006 2/01/2007 2/07/2007 2/01/2008 2/07/2008 2/01/2009 2/07/2009 2/01/2010 2/07/2010 2/01/2011 2/07/2011 2/01/2012
S&P GSCI Wheat(CBOT) Spot - PRICE INDEX
Canola Oil A$
Source: Datastream
Source: Datastream
We expect the benefit of cheaper COGS to be skewed to H212 and FY13 given forward hedging although this depends on the degree to which GFF maintains its prices. Our weekly analysis of retail shelf prices reveals the following: Australian Bread pricing is rational (currently): Branded bread prices were cut by c5% in mid-2011 when the supermarkets reduced their private label offerings to $1.00/loaf for white and $1.50/loaf for wholemeal and multigrain. There were no further changes again until the New Year when George Weston recently increased its Abbotts Village range by c5%. This bodes well for GFF in our view but we need to see prices maintained at this level for the next few months for lower COGS to benefit GFFs bottom line in H212 and FY13. NZ milk pricing may move down with lower input costs: This week Fonterra cut the shelf price of its 2-litre milk products by 1.3%, being the first price adjustment in about 1 year (in January 2011 NZ milk prices were increased by 1.7% on average for most brands and products, then remained unchanged for the rest of the year). GFF and WOW private label milk prices have not changed but the next few weeks / months will be key in determining how much of the lower raw milk cost hits GFFs bottom line versus what is reinvested in price.
but fuel costs remain high

Fuel costs are a significant consideration for a business like GFF with daily fresh delivery. For the H112 reporting period the average weekly retail price for standard unleaded petrol was 14% higher year-on-year. The last time we saw a spike in fuel prices was June 2008 when GFF cited $30m higher fuel costs skewed to H208. Since then we believe the company has renegotiated some distributor contracts to enable pass-through of fuel costs however we still see risk of some pressure.
H112 fuel prices 14% higher yoy
UBS 50
Chart 3: Average weekly Australian retail price for standard unleaded petrol
170 160 150 140 130 120 110 100 06-Jan-08 06-Jan-09 06-Jan-10 06-Jan-11 06-Jan-12 06-Jul-08 06-Oct-08 06-Jul-09 06-Oct-09 06-Jul-10 06-Oct-10 06-Jul-11 06-Apr-08 06-Apr-09 06-Apr-10 06-Apr-11 06-Oct-11
$30m additional fuel cost H208 H112 +14%
Price (cents)
Source: AIPP
New management team change takes time

GFF had significant management turnover in 2011 with most executive appointments only commencing during H112. This is another reason not to expect any marked improvement in operating performance with the H112 results, which will be the first presented by new CFO Shane Gannon.
Table 2: GFF executive management team
Business Group CEO Group CFO Group Strategy MD Fresh Baking MD Home Ingredients MD Integro MD NZ MD Asia Pacific Source: UBS; GFF Management Chris Delaney Shane Gannon Neil Kearney Pankaj Talwar Andrew Hipperson Stuart Roberts Peter Reidie Aaron Canning Start Jul-11 Oct-11 Oct-11 Dec-11 Jan-11 Oct-08 Oct-11 Jan-11 MD of NZ Dairy since Jun-08 Previously Asia Pac CFO Background Previously Campbell Soup Asia Pac President Previously CSR CFO; GFF's 4th CFO since IPO in Dec-05 Temp CFO for 10 months prior Previously Ebro Food Nth America Chief Marketing Officer; Baking's 3rd MD in 6 years Previously Asia Pac MD
New management will take time to impact in our view
GFFs Board has been relatively more stable in recent years but we expect two changes in 2012, which may be flagged with the interim results. Firstly, a NZ representative is to be added to the Board, which is important given one-third of group sales are generated there. And secondly, the Chairmanship is likely to be rotated as Max Ould has been in the role for 6 years.
New Chair and additional Board appointment expected in 2012
UBS 51
Table 3: GFF Board of Directors

Director Graeme Hart Thomas Degnan Timothy Hardman Max Ould (Chairman) Hugh Perrett Peter Margin Gavin Walker Clive Hooke Ian Johnston Chris Froggatt Steven Gregg Peter Hearl Chris Delaney Source: UBS; GFF Appointed 26-Sep-05 26-Sep-05 26-Oct-05 14-Nov-05 14-Nov-05 14-Nov-05 23-Feb-07 19-Apr-07 26-May-08 27-Aug-09 26-Feb-10 26-Feb-10 04-Jul-11 25-Mar-11 29-Apr-11 11-Dec-09 Resigned 01-Nov-07 01-Nov-07 01-Nov-07
Strategic review progress

In November 2011 GFF announced three strategic initiatives and we look for an update on these with the interim results.
1. $100m cost out (Project Renaissance)

GFF says it has a high degree of confidence in achieving $100m cost out over the next 4 years. This represents just over 4% of the companys cost base and will come from: (1) Integrating businesses, thereby reducing duplication of R&D, marketing, finance, field sales etc; (2) Consolidating the manufacturing base with plant closures in Bunbury WA (Integro) and Rotorua New Zealand (Baking); and (3) Revising the Baking model to achieve supply chain efficiencies. Related restructuring costs are estimated to be at least $60m over the four year period.
Table 4: GFFs Project Renaissance
Cost out $40m $25m $35m $100m Achieved FY12-13 FY13-14 FY14-15 Over 4 years Restructure charge $33m $20-25m TBD >$60m Source Integrating businesses & cutting overheads New Baking model New Baking model
GFF should reiterate $40m cost out in FY12-13 and $100m over 4 years
Source: UBS; GFF
It is worth noting that competitor George Weston is also implementing a significant cost out program, which makes it imperative for GFF to achieve its target in our view.
UBS 52
2. Revised Baking model (longer dated)

GFF has often said that it costs more to deliver a loaf of bread than make it and as such the real prize for the industry has been in changing the distribution model. GFF actually calculates that the delivered cost of bread is 30% raw materials; 27% manufacturing and conversion; and 43% delivery and returns (within this 43% we believe wastage is up to one-quarter or $40-50m). GFF cites encouraging discussions with retailers already underway with regards to its outbound logistics but has otherwise been vague about the likely new model. Extending the shelf life of bread is a possibility but could result in share loss to fresher alternatives in our view. Passing inventory ownership to the retailers earlier in the supply chain could also be a consideration (similar to the UK model where supermarkets stock the shelves) but we fail to see why WOW or Coles would take on this inventory risk. We believe a combination of the following is likely: Greater use of third-party contractors to warehouse and deliver bread; Elimination of some products to some customers (tailoring range and price accordingly); Elimination of some products to some (especially remote) geographies; Partnering with other FMCG companies to make use of duplicate distribution systems already in place (e.g. newspapers and bread delivered on the same truck although this example is not actually permitted by food regulations). Given the importance and long time frame of GFFs revised Baking business model (cost savings are flagged for FY13-15) we expect to hear more detail going forward. As the cost to serve by geography and brand is addressed we note that GFF may expose capacity utilisation issues that will lead to more asset footprint reviews.
The cost prize from outbound logistics is longer dated (FY13-15) and more complicated
3. Divestments
GFF is investigating options for businesses it has identified as non-core and underperforming and these have combined revenue in excess of $600m or c23% of group hence its divestment program is a material re-shaping of the company. If all are sold, we believe GFF could realise up to $400m cash, which would significantly reduce its debt balance of c$630m (post October 2011 equity raising). The bigger divestments are Integro and NZ Milling, both of which had received unsolicited interest late last year.
Material divestment program
UBS 53
Table 5: GFF non-core and to be determined businesses

Non-core business Integro NZ Milling To be determined NZ Meat NZ Convenience Meals Dips Biscuits Frozen Pastry Other Total Source: UBS estimates UBSe revenue 330 80 UBSe revenue 70 10 50 90 10 10 650 UBSe value (A$m) UBS comments 240 ACCC blocked sale March 2010 55 FY10 EBIT $8m UBSe value (A$m) UBS comments 15 We est. <$3m EBIT Negligible Never separately discussed 25 Acquired in Mar-07 for <$50m 65 Acquired in Mar-08 for $80m; value in physical asset Negligible Never separately discussed; main brand Pampas Negligible General brand and SKU rationalisation 400 GFF cited >$600m revenue
Integros EBIT improved from $19m in FY10 when Cargill was prepared to pay $240m for the business to $32m in FY11 after the ACCC blocked the transaction. In our view the uplift reflected easing COGS and the absence of restructuring charges more so than better underlying performance and we forecast essentially flat EBIT of $32m in FY12. We assume $240m remains a realistic price for the whole business but note that GFF is likely to consider breaking it up (there are 4 production sites across Australia and NZ) or selling a stake to force a transaction. Potential acquirers of all or parts of Integro could include its largest competitor Cargill (ACCC may relax its view given changes to the industry and/or deal); its smaller competitor Peerless Foods (privately owned), Wilmar International (the Singapore-listed agri business that has increased imports to the market) and Olam (another Singapore-listed agri business). NZ Milling is probably worth $50-60m in our view and follows GFFs divestment of Australian Milling to Allied Mills some years ago. It is unlikely that the main competitor George Weston Foods could acquire in our view. We think a more logical buyer could again be Allied Mills (JV between Cargill and Graincorp) and our chief concern would be any supply contract entered into upon divestment as the majority of volume is currently internal to GFF. Companies typically re-rate upon the exit of an under-performing business and divestments could be a positive catalyst for GFF. Recall Coca-Cola Amatil selling South Korea at a loss in October 2007; Lion Nathan exiting its lossmaking China business in 2004; and Fosters selling its underperforming brand in Europe in 2006. Another potentially positive implication of divestments is the fact that selling at a profit would generate a tax liability for GFF and therefore franking credits useful because in recent years GFFs dividends have been only 20% franked. Integros book value at 30/06/11 was $152m so we assume this can be sold at a profit. Other (smaller) divestments probably risk being sold at a book loss in our view.
Buyers exist and GFF could consider break up or partial sale to force a deal
Allied Mills a logical buyer in our view; related supply agreement a risk
Divestments a potential catalyst for GFF to re-rate
Selling at a profit could help GFFs franking account balance
UBS 54
GFFs balance sheet would improve again post divestments (it is already sound following the October 2011 equity raising in our view) but on the flipside we estimate EPS dilution of c6% in FY13 from selling Integro for $240m. These sensitivities are summarised below.
Table 6: Sensitivity of GFF FY13e EPS to Integro sale price and EBIT
Integro divestment price (A$ m) 180 26.5 28.5 FY13e EBIT 30.5 32.5 34.5 36.5 38.5 Source: UBS estimates -5.7% -6.7% -7.6% -8.6% -9.5% -10.5% -11.4% 210 -4.6% -5.5% -6.5% -7.4% -8.4% -9.3% -10.3% 240 -3.5% -4.4% -5.3% -6.3% -7.2% -8.2% -9.1% 270 -2.3% -3.3% -4.2% -5.2% -6.1% -7.1% -8.0% 300 -1.2% -2.1% -3.1% -4.0% -5.0% -5.9% -6.9%
Divestments improve the balance sheet but create an EPS headwind
Table 7: Sensitivity of GFF FY13e EBITDA / interest cover to Integro sale price & EBITDA
Integro divestment price (A$ m) 180 26.5 28.5 FY13e EBITDA 30.5 32.5 34.5 36.5 38.5 6.3x 6.3x 6.3x 6.2x 6.2x 6.1x 6.1x 210 6.7x 6.7x 6.6x 6.6x 6.5x 6.5x 6.4x 240 7.1x 7.0x 7.0x 6.9x 6.9x 6.8x 6.8x 270 7.5x 7.5x 7.4x 7.4x 7.3x 7.3x 7.2x 300 8.0x 8.0x 7.9x 7.8x 7.8x 7.7x 7.7x
Source: UBS estimates; GFF covenant not recently disclosed but was >3.0x at time of 2005 IPO
Valuation and rating

Our sum-of-the-parts based price target of $0.55 is trimmed from $0.57 as we roll forward to FY13E earnings. At our target GFF would trade on a FY13E PE of 8.1x, being a 32% discount to the All Ind ex Fin in line with its historical 30% discount.
UBS 55
Table 8: GFF sum-of-the-parts valuation

FY13E (A$ m) Fresh Baking Home Ingredients Fresh Dairy & Meats Integro Asia Pacific Corporate costs Enterprise value Net debt FY13e Equity value No shares Per share Implied FY13e PE at target All Ind ex Financials PE PE prem/(disc) to market FY13e div'd yield at target Source: UBS estimates Sales 1,028 485 413 342 310 NA 2,577 EBIT 98 75 39 32 57 -49 253 Margin 9.5% 15.5% 9.5% 9.5% 18.5% NA 9.8% Multiple 6.5x 6.0x 6.5x 6.5x 7.0x 6.0x 6.6x Value Comment 635 Cash generative oligopoly; defensive low growth; cost out opps 451 High margin branded business; low growth 255 Highly competitive market 211 Largely unbranded and low margin 401 Geographic and category expansion opportunities, high returns -294 1,659 -566 1,092 1,993 $0.55 UBS price target 8.1x 11.9x -32% 8.9% Historic discount range 25-30%
Chart 4: Relative forward PE of GFF versus ASX200 Industrials ex Financials

1.00 0.90 0.80 0.70 0.60 0.50 0.40
Fe b06 Ma y-0 6 Au g06 No v-0 6 Fe b07 Ma y-0 7 Au g07 No v-0 7 Fe b08 Ma y-0 8 Au g08 No v-0 8 Fe b09 Ma y-0 9 Au g09 No v-0 9 Fe b-1 0 Ma y-1 0 Au g10 No v-1 0 Fe b11 Ma y-1 1 Au g11 No v-1 1
Relative Forward PE of GFF vs ASX/200 Ind-XF
Source: UBS estimates
UBS 56
Catalysts
Date 27-Feb-12 24-Apr-12 12-Jul-12 Mid Aug 2012 10-Sep-12 6-Nov-12 End Nov 2012 End Nov 2012 Source: UBS
Table 9: GFF upcoming news flow

Newsflow AB Foods (George Weston parent) Q2 trading update with commentary on Australian baking trends AB Foods (George Weston parent) H112 results with commentary on Australian baking trends AB Foods (George Weston parent) Q3 trading update with commentary on Australian baking trends GFF FY12 results AB Foods (George Weston parent) Q4 trading update with commentary on Australian baking trends AB Foods (George Weston parent) FY12 results with commentary on Australian baking trends GFF AGM and likely trading update Likely rotation of GFF Chairmanship
UBS 57
Goodman Fielder (GFF.AX)

MARKET INFORMATION
Rating: Price (as of 31-Jan-12): (A$) Price Target (12 months): (A$) Shares outstanding: (m) Market Capital (A$ m): Avg. daily turnover (A$ m): Year end: Website: Major Shareholders: Neutral 0.53 0.55 1,955.6 1,026.7 3.3 June www.goodmanfielder.com.au NAB, BlackRock, DFA 2011 (167) 133 (0.11) 0.09 (27.4) 13.1 0.07 80 6.1 1,484.0 0.87 1.4 10.7 20 2011 2,556 356 (69) 287 (101) 0 0 185 (47) (5) 0 133 (300) (167) 2011 80 246 196 608 1,571 3 79 2,783 313 963 207 0 1,483 8 1,292 2,783 (884) 2012E 117 127 0.07 0.07 (21.5) 7.4 0.05 69 9.3 1,955.6 0.80 0.7 12.8 20 2012E 2,514 330 (73) 257 (77) 0 0 180 (48) (6) 0 127 (10) 117 2012E 80 242 193 624 1,571 3 79 2,791 314 678 207 0 1,198 13 1,579 2,791 (598) 2013E 134 159 0.07 0.08 12.8 6.6 0.05 63 9.6 1,955.6 0.82 0.6 12.4 20 2013E 2,577 353 (75) 278 (61) 0 0 217 (52) (6) 0 159 (25) 134 2013E 80 248 198 649 1,571 6 79 2,830 321 646 210 0 1,176 19 1,635 2,830 (566) 2014E 151 171 0.08 0.09 7.4 6.1 0.06 66 10.8 1,955.6 0.84 0.6 16.7 20 2014E 2,649 368 (78) 290 (55) 0 0 235 (58) (6) 0 171 (20) 151 2014E 80 255 203 641 1,571 3 79 2,832 328 572 207 0 1,106 25 1,701 2,832 (492)
COMPANY DESCRIPTION
Goodman Fielder is a leading Australasian food company producing bread, PROFILEspreads and oils, dairy and meat. It has a national distribution network in Australia and NZ and also sells to the Pacific Islands and Asia. Bakery, Spreads & Oils were spun out of Burns Philp in Dec 2005 and New Zealand Dairy Foods was acquired at the same time from Rank Group. Goodman Fielder has a strong product portfolio with well-recognised brands including Wonder White, Helga's, Meadow Lea, White Wings, Praise, Paul Newman's Own (under licence), Pampas, Quality Bakers, Vogel's (under licence), Ernest Adams, Irvines and Meadow Fresh.
INVESTMENT SUMMARY
(A$ m) Net profit [reported] Net profit [adjusted] EPS [reported] EPS [adjusted, diluted] EPS Growth (%) PER [adjusted]* (x) Dividend Payout ratio, [EPS adj.] (%) Dividend Yield [Net]* (%) Shares [period-avg, basic] (m) Book value per share Price to Book* (x) Equity Free Cash Flow Yield (%) Franking (%)
KEY RATIOS
2011 Profitability (%) Revenue growth EBITDA margin EBIT margin Effective tax rate Return on Inv Cap (post-tax) Return on Equity Capital Structure Net Debt / EBITDA (x) Net Debt / Common equity (%) Net Debt / Core EV* (x) Capex / Depreciation (x) EBIT / Net Interest (x) (A$ m) Revenue EBITDA [adjusted] Depreciation & Amortisation EBIT [adjusted] Net interest Income from associates Other non-operating items Profit before tax [adj] Tax on pre-abnormal profit Minority Interests Dividends (preferred) Net Profit [adjusted] Abnormal Gain/(Loss) after Tax Net Profit [reported] (3.9) 13.9 11.2 25.1 9.0 9.0
2012E (1.6) 13.1 10.2 26.4 8.7 8.8
2013E 2.5 13.7 10.8 23.9 9.6 9.9
2014E 2.8 13.9 11.0 24.7 9.9 10.3
2.5 67.9 0.3 1.5 2.8 1H 11 1,337 210 (32) 179 (47) 0 0 131 (36) (3) 0 67 0 93 2011 1,755 900 0 54 7 2,716 (3) 2,713 1.1 7.6 9.5 11.2 1.1 2011 2,556 1,023 478 423 334 299 287 102 80 40 32 55 (22)
2.2 37.5 0.3 1.2 3.3 2H 11 1,219 108 (54) 0 0 54 (11) (3) 0 67 (300) (260) 2012E 1,027 741 0 55 7 1,830 (3) 1,827 0.7 5.5 7.1 7.2 0.8 2012E 2,514 1,003 473 403 334 302 257 83 73 37 31 56 (23)
1.6 34.2 0.3 1.3 4.6 1H 12E 1,271 127 (38) 0 0 88 (23) (3) 0 63 (8) 56 2013E 1,027 582 0 57 7 1,672 (6) 1,666 0.6 4.7 6.0 6.6 0.8 2013E 2,577 1,028 485 413 342 310 278 98 75 39 32 57 (24)
1.4 28.5 0.3 0.9 5.3 2H 12E 1,243 131 (39) 0 0 92 (25) (3) 0 64 (3) 61 2014E 1,027 529 0 58 7 1,621 (3) 1,618 0.6 4.4 5.6 5.4 0.7 2014E 2,649 1,054 497 423 350 325 290 103 77 41 33 60 (25)
PROFIT AND LOSS

(A$ m) Revenue EBITDA [adjusted] Depreciation & Amortisation EBIT [adjusted] Net interest Income from associates Other non-operating items Profit before tax [adj] Tax on pre-abnormal profit Minority Interests Dividends (preferred) Net Profit [adjusted] Abnormal Gain/(Loss) after Tax Net Profit [reported]
PROFIT AND LOSS [HALF YEAR]
BALANCE SHEET
(A$ m) Cash & equivalents Accounts receivable Inventory Fixed assets Intangibles Investments Other assets Total Assets Accounts payable Short & long term debt Provisions & other Preferred securities Total liabs & pref shares Minorities Common equity Total liabilities & equity Net cash / (debt)
ENTERPRISE VALUE*
(A$ m) Market capital Net debt / (cash) [avg] Estimated share buy backs Minorities Pension provisions Total Enterprise Value (Non-core assets) Core Enterprise Value Core EV Ratios EV / Sales EV / EBITDA EV / EBIT EV / OpFCF [post-tax] EV / Invested Capital
DIVISIONAL BREAKDOWN
(A$ m) Total Revenue Baking Home Ingredients Dairy & Meats Commercial Pacific EBIT Baking Home Ingredients Dairy & Meats Commercial Pacific Adjustment
CASH FLOW
(A$ m) Operating income [EBIT, UBS] Depreciation & Amortisation Net change in working capital Other (operating) Pre-tax op cash flow Interest (paid) / received Tax paid Other Operating cash flow Capital expenditure Free cash flow Net (acquisitions) / disposals Dividends paid (Common) Shares issued/(repurchased) 2011 287 69 (16) 0 340 (101) (40) 0 199 (104) 95 0 (148) 0 2012E 257 73 8 0 338 (77) (48) 0 213 (88) 125 0 (79) 0 2013E 278 75 (5) 3 352 (61) (52) 3 242 (101) 141 0 (98) 0 2014E 290 78 (5) 0 363 (55) (58) 0 250 (70) 180 0 (107) 0
Source: UBS estimates, * Historical valuations are based on an average share price for the period. Current & future valuations are based on a share price of A$0.53 on 31-Jan-2012
UBS 58
Goodman Fielder Limited Goodman Fielder is a leading Australasian food company producing bread, spreads and oils, dairy and meat. It has a national distribution network in Australia and NZ and also sells to the Pacific Islands and Asia. Bakery, Spreads & Oils were spun out of Burns Philp in Dec 2005 and New Zealand Dairy Foods was acquired at the same time from Rank Group. Goodman Fielder has a strong product portfolio with well-recognised brands including Wonder White, Helga's, Meadow Lea, White Wings, Praise, Paul Newman's Own (under licence), Pampas, Quality Bakers, Vogel's (under licence), Ernest Adams, Irvines and Meadow Fresh.
Statement of Risk Higher commodity costs; Increased private label in product categories; competitors discounting prices; integration of acquisitions; management changes; funding acquisitions; NZ retail milk prices; changes in tariffs in PNG, Fiji or New Caledonia.
UBS 59
ab
UBS Investment Research Woodside Petroleum Limited
Woodside Catalysts
Share price drivers in 2012 Woodside share price catalysts over 2012 include delivering successful Pluto LNG T-1 start up (a key investment risk), progress with Laverda oil (Norton could add oil reserves that facilitates a stand alone development decision), news on the potential Pluto LNG T-2 expansion (Hess / XOM decision?), potential Browse equity sale / delivery of FID readiness by mid 2013, progress with Sunrise FLNG. Key dates to watch for 22 Feb: 2011 Full Year Result. Late March 2012: Pluto LNG T-1 start up. 1Q 2012: Norton exploration well (Laverda Oil Project). Mid 2012: potential Hess gas supply decision (Pluto LNG expansion). 1H 2013: Browse LNG FID readiness / equity sale. After East Timor election: potential Sunrise FLNG update. Equity drives alignment At both Pluto and Browse we believe whoever provides the gas (Pluto expansion) and / or commits to LNG off take (Pluto / Browse) will also become a new equity partner in the respective LNG project. At Pluto, this may be attractive to Hess, but less so for ExxonMobil (unless they also gain operatorship). Alternatively, from a volume perspective, Scarborough gas must be more attractive to WPL (one large field). We expect a Browse early equity sale only if it facilitates/adds project value. Valuation: $31.06 (DCF at 10%) Our NAV estimate of $31.06 is based on DCF (10% nominal rate) of forecast cash flow over the 2P reserve life of producing assets, and Pluto LNG T-1. Our 12month price target of $38.35 includes 50% risking for potential Pluto LNG T-2 expansion, Sunrise FLNG and Browse LNG.

Australia Oil Companies, Secondary 12-month rating 12m price target Price
Buy
Unchanged
A$38.35/US$40.83 Unchanged A$34.21/US$36.36 (ADR)
RIC: WPL.AX BBG: WPL AU
1 February 2012
Trading data (local/US$) 52-wk range Market cap. Shares o/s ADR ratio Free float Avg. daily volume ('000) Avg. daily value (m) Balance sheet data 12/11E Shareholders' equity P/BV (UBS) Net Cash (debt) Forecast returns Forecast price appreciation Forecast dividend yield Forecast stock return Market return assumption Forecast excess return EPS (UBS, US$) 12/11E H1 H2E 12/11E 12/12E UBS 1.07 0.99 2.05 2.31 Cons. 2.15 2.36 12/10 Actual 1.07 0.77 +12.1% 3.2% +15.3% 8.6% +6.7% US$12.2bn 2.3x (US$5.73bn) A$48.16-29.80/US$52.13-29.30 A$27.6bn/US$29.3bn 806m (ORD)/806m (ADR) 1 ADR:1 ORD 76% 2,833/10 A$95.1/US$0.3
Highlights (US$m) Revenues EBIT (UBS) Net Income (UBS) EPS (UBS, US$) Net DPS (UBS, US$) Profitability & Valuation EBIT margin % ROIC (EBIT) % EV/EBITDA (core) x PE (UBS) x Net dividend yield %
12/09 3,446 1,644 1,011 1.41 0.95 5-yr hist av. 52.3 24.9 10.4 22.3 2.7
12/10 4,193 2,023 1,420 1.84 1.05 12/10 48.2 14.5 11.5 22.0 2.6
12/11E 4,802 2,397 1,630 2.05 1.04 12/11E 49.9 14.1 9.8 17.0 3.0
12/12E 5,456 2,885 1,863 2.31 1.16 12/12E 52.9 15.2 8.0 15.7 3.2
12/13E 6,403 3,505 2,340 2.90 1.45 12/13E 54.7 17.4 6.5 12.5 4.0
Performance (A$)
70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 01/09 04/09 07/09 10/09 01/10 04/10 07/10 10/10 01/11 04/11 07/11 10/11 01/12 Stock Price (A$) Rel. All Ordinaries 120 100 80 60 40 20 0
Source: UBS
Gordon Ramsay
Analyst gordon.ramsay@ubs.com +61-3-9242 6631
Cameron Hardie
Analyst cameron.hardie@ubs.com +61-3-9242 6383
Woodside Petroleum Limited 1 February 2012
Woodside Catalysts
Woodside catalysts over 2012 that could help generate a further share price rerating include the 2011 Result, delivering successful Pluto LNG T-1 start up (a key investment risk), progress with Laverda oil (the Norton well could add oil reserves that facilitates a stand alone development decision), news on the potential Pluto LNG T-2 expansion (Hess decision?), Browse equity sale and delivery of FID readiness by mid 2013, progress with Sunrise FLNG.
Timetable
2011 Full Year Result: 22nd February Pluto LNG T-1: Late March 2012 start up Laverda oil project: 1Q 2012 Norton exploration well Pluto LNG T-2 expansion: Mid 2012 Hess gas supply decision Browse LNG FID readiness: by 1H 2013 Sunrise FLNG: No date (after March election)
Pluto LNG T-1

The start up of Pluto LNG T-1 is expected by around late March 2012 and a successful start up to this very material project for Woodside is the key to delivering near term Woodside production and earnings growth. After meeting with Peter Coleman (he has a very strong operational focus), we believe Woodside will do everything it can to achieve its late March 2012 Pluto LNG T1 start up goal. We also assume a slight start up delay into April (e.g. cyclone related) will not affect Woodside 2012 production guidance.
Laverda Oil Project

Woodsides Investor Update in late Nov 2011 highlighted good drilling results from East Laverda, and at a separate fault block at Opel-1 and Opel-2. Norton-1 is planned for 2012. Laverda has potential to become a new c100 mmbbl development in the Exmouth Sub Basin.
Pluto LNG T-2

Woodside's exploration program (as currently defined) appears to lack the potential to deliver enough gas for Pluto LNG T-2, in our view. As a result, we believe Woodside is going to have to reach a commercial agreement with Hess (13 gas discoveries UBSe up to around 3 TCF) and / or ExxonMobil and BHP Billiton (Scarborough / Thebe UBSe 12 TCF).) in order to expand Pluto LNG. Hess has awarded front-end engineering and design contracts for its Equus offshore gas project offshore WA to WorleyParsons and JP Kenny. Hess has previously stated it expects to decide where its gas from the 13 discoveries it has made in WA-390-P goes by mid 2012, and we believe the choice is going to be either Pluto LNG or Wheatstone LNG. ExxonMobil is committed to trying to find a commercial development of Scarborough as soon as possible, and joint evaluation with BHP Billiton is taking place to optimise the development. Scarborough is deep (900m) and distant (300km offshore), however, there is significantly more gas in Scarborough Thebe than the Hess discoveries. The timetable ExxonMobil and BHP Billiton are working to is undefined.
UBS 61
We can't see Woodside possibly being in a position to FID Pluto LNG expansion until 2013 (at the earliest) and we think this would be dependant on striking a commercial third party gas supply deal with Hess or ExxonMobil / BHP. It would also probably take around 3-4 years to build the expansion LNG train and offshore gas supply system (producing wells, TLP, etc) for the project expansion. Net net, we see first Pluto expansion LNG sales by 2016 at the earliest, and probably later.
Browse LNG
Woodside is currently undertaking FEED for Browse LNG which is proposed to be in a position to be able to reach a final investment decision (FID) by 1H 2013 (prior mid 2012). Woodside is also conducting a limited process to assess the potential sale of a minority portion of the companys relatively high 46% equity in the proposed Browse LNG development. We ultimately expect Woodside to farm down its high level of equity in this project (currently around 46%) to an LNG buyer / other party. This sale would be a minority interest only, which implies no more than 50% of Woodside's 46% stake would be sold. The potential buyers of Browse equity range from PetroChina (a prior preliminary Browse LNG sales agreement expired), MIMI (Mitsubishi-Mitsui is the missing partner from the North West Shelf Project), Shell / BHP (equity increase to align with NWS), BP (underexposed to LNG in the region). The time table for this possible farm down exercise is open, and subject to Woodside receiving an early offer that it accepts. We expect a Browse early equity sale only if it facilitates/adds project value.
Sunrise FLNG
Shell has stated that Sunrise FLNG is intended to be its second FLNG facility in Australia, after Prelude. The Sunrise joint venture has also agreed that FLNG is the best economic outcome for the development of the Sunrise field. The time table on this potential project development is also uncertain, since moving forward is dependant on Timor Leste endorsing the FLNG development concept. So far Timor Leste has been seeking an onshore LNG plant which requires a gas trunkline to shore from the Sunrise gas field to cross a 3.3km deep submarine trench. The Sunrise JV has said this is technically very risky / high cost. Peter Coleman is working hard to rebuild Woodsides relationship with the East Timorese. No news update on Sunrise is expect until after the March election. Overall, we believe Woodside could sell its Browse and Sunrise stakes tomorrow for at least (or more) than the value in the UBS Woodside share price target (50% risked) of A$1.88/share for Browse and A$1.30/share for Sunrise. Browse has 2P resources of 13.3 TCF and 360 mmbbls of condensate. Sunrise has 2P resources of 5.1 TCF and 226 mmbbls of condensate.
UBS Valuation and Price Target

Woodside's base underlying business (including Pluto LNG T-1) is valued at around A$31.06/share. The developing business / uncommitted projects included in our price target of A$38.35 are Pluto LNG T-2, Browse and Sunrise LNG (all risked at 50% of the preliminary estimated value).
UBS 62
Woodside Petroleum (WPL.AX)

MARKET INFORMATION Rating: Price (as of 31-Jan-12): Price Target (12 months): Issued Capital: Market Capitalisation: Avg. daily turnover (US$m) Year end: Website: Major Shareholders: INVESTMENT SUMMARY (A$m) Net profit [reported] ($m) Net profit [adjusted] ($m) EPS [reported] () EPS [adjusted, diluted] () EPS Growth (%) PER [adjusted] (x) Dividend () Payout ratio (%) Dividend Yield (%) FCF Yield (%) Franking (%) Shares [period-average, diluted] (m) VALUATION Valuation per share [NAV @10%] ($) Share Price Target [12 months] ($) Price/NAV [10% disc rate] (x) Operating Assets [JH10] NW Shelf Stybarrow Otway Enfield-Laverda Ohanet Vincent Pluto Other Projects/Investments Gross Assets Exercise Options Net Borrowings Corporate Costs Net Asset Value @ 10% discount rate ENTERPRISE VALUE (A$m) Enterprise Value EV/EBITDA (x) EV/Operating Free Cash Flow (x) EV/DACF (x) EV/2P Reserves (A$/boe) ROACE (%) EPS SENSITIVITIES Commodity Currency Oil COMPANY DESCRIPTION Buy 34.21 38.35 805.7 27,562.0 96.0 December www.woodside.com.au Shell 23.97%
Analyst/s: Gordon Ramsay; Cameron Hardie Email: Gordon.Ramsay@ubs.com 31-Jan-12 Woodside Petroleum Limited (WPL) operates Australia's leading resource project, the North West PROFILE-300000855EN08022829 Shelf (NWS) Venture. The fifth NWS LNG train was completed in October 2008, which lifted gross NWS LNG production capacity to 16.3mmtpa. Pluto LNG T1 first LNG sales are expected from March 2012. Pluto LNG T-2, Browse LNG and Sunrise FLNG represent additional potential LNG developments currently undergoing evaluation.
OPERATIONAL ASSUMPTIONS 2010 1577.0 1420.0 204.0 183.7 30 18.6 105.0 1 3.1 13.7 100 773.1 2011E 1426.8 1629.8 179.7 205.3 12 16.7 104.3 1 3.0 9.3 100 793.9 2012E 1863.4 1863.4 231.3 231.3 13 14.8 115.6 1 3.4 13.6 100 805.7 2013E 2340.1 2340.1 290.5 290.5 26 11.8 145.2 0 4.2 16.7 100 805.7 1H11 Production Sales Gas M Gj LNG Mt Condensate M bbl LPG x1000 t Oil M bbl Total Production (mmboe) Cond. Production rate x1000 bpd Oil production rate x1000 bpd Total production rate x1000 bpd Assumptions Oil WTI Price US$/bbl Exchange Rate USc/A$ 43.3 1.3 4.7 128.5 7.2 31.9 26.3 40.1 177.5 111.3 103.44 2H11E 43.9 1.2 4.4 102.4 9.6 32.7 24.3 53.1 181.5 110.9 103.15 2010 96.8 2.6 10.5 273.1 20.8 71.7 29.1 57.7 199.2 79.6 92.08 2011E 87.2 2.5 9.1 230.9 16.8 64.6 25.3 46.6 179.5 111.1 103.29 2012E 83.2 4.3 8.6 136.2 14.7 76.4 24.0 40.8 212.1 105.0 100.00 2013E 82.9 6.4 10.3 133.5 12.3 93.9 28.7 34.1 260.9 97.0 96.15
31.06 38.35 1.10 A$m 9767 358 9 1587 12 1156 16836 786 30510 0 (5528) (412) 24571 1235 45 1 201 1 146 2128 99 3856 0 (699) (52) 3106
2010 34585 11.5 12.9 14.6 10.8 10.2
2011E 28206 9.8 10.8 10.9 8.9 9.6
2012E 28187 8.0 8.7 8.9 9.1 9.8
2013E 28186 6.5 7.0 7.6 9.3 11.6
Base Change 5 10%
2011E
2012E 2013E EPS Change 0.0% 0.0% 0.0% 0.3% 0.0% 0.1%
CASH FLOW (A$m) EBITDA (pre exploration expense) Depreciation & Amortisation Exploration Expenditure Net change in working capital Other (operating) Pre-tax op cash flow Interest (paid) / received Tax paid Other Operating cash flow Capital expenditure (non-maint.) Free cash flow Net (acquisitions) / disposals Dividends paid (Common) Shares issued/(repurchased)
2010 3101 (749) 0 857 0 3629 (149) (803) (170) 2507 (3649) (1142) 0 (547) 1060
2011E 3641 (657) (474) (527) 0 2527 7 (781) (136) 1617 (4184) (2567) 0 (728) 334
2012E 4122 (878) (450) (9) 0 3754 (110) (911) 0 2732 (2307) 426 0 (932) 0
2013E 4814 (1121) (250) (16) 0 4610 (75) (1090) 0 3445 (2617) 828 0 (1170) 0
DIVISIONAL BREAKDOWN [EBIT] (A$m) NW Shelf Laminaria Enfield Mutineer/Exeter Stybarrow Ohanet Otway Vincent Neptune PROFIT & LOSS (A$m) Sales Revenue Operating Cash Profit Depn & Amortisation Operating Profit Exploration Expensed Corporate/Other Expenses EBIT Net interest Profit before tax Tax expense Equity Associated NPAT Minority Interests Dividends () Net Profit [reported] Abnormal Gain/(Loss) after Tax Net Profit [adjusted] EBITDA margin (%) Net Interest Cover [EBIT] (x) Tax Rate (%) EBIT/Total Assets (%) NPAT/Equity (%) EBIT/Avg Cap Employed (%) BALANCE SHEET [Selected Items] (A$m) Net Working capital Fixed Assets Net Other Capital Employed Net Cash / (Debt) Total Equity [incl. minorities] Minorities Net Debt / Equity (%) Book Value per Share($)
1H11 903 1 146 (6) 173 3 0 172 24 1H11 2253 1785 (279) 1506 (213) (46) 1247 (15) 1218 (390) 0 0 55 828 (14) 842
2H11E 936 50 209 14 184 2 0 298 22 2H11E 2549 1931 (377.7) 1553 (374) (29) 1150 0 880 (281) 0 0 49 599 (189) 788
2010 1504 75 350 5 118 7 0 269 37 2010 4193 3262 (749) 2513 (329) (161) 2023 18 2274 (697) 0 0 105 1577 157 1420 77.8 (112.4) 30.7 10.0 14.3 14.1
2011E 1839 51 355 8 357 5 0 470 47 2011E 4802 3716 (657) 3059 (587) (75) 2397 (15) 2098 (671) 0 0 104 1427 (203) 1630 77.4 160.2 32.0 10.7 14.0 14.0
2012E 1527 57 305 3 215 0 0 308 33 2012E 5456 4182 (878) 3304 (360) (60) 2885 (110) 2774 (911) 0 0 116 1863 0 1863 76.7 26.2 32.8 12.2 14.7 15.1
2013E 1504 29 177 0 130 0 0 311 29 2013E 6403 4875 (1121) 3754 (188) (61) 3505 (75) 3430 (1090) 0 0 145 2340 0 2340 76.1 46.9 31.8 14.0 16.2 17.3
2010 (814) 18390 (1915) 15661 (3975) 10496 (595) 37.9 14.22
2011E (709) 21306 (2086) 18510 (5725) 11579 (603) 49.4 15.12
2012E (701) 22374 (2086) 19588 (5871) 12511 (603) 46.9 16.28
2013E (684) 23683 (2086) 20913 (4526) 15181 (603) 29.8 19.59
Source: Company accounts, UBS estimates. UBS valuations are stated before goodwill, exceptionals and other spcieal items. Note: For some companies, the data represents an extract of the full company accounts.
Source:
UBS 63
Woodside Petroleum Limited Woodside Petroleum Limited (WPL) operates Australia's leading resource project, the North West Shelf (NWS) Venture. The fifth NWS LNG train was completed in October 2008, which lifted gross NWS LNG production capacity to 16.3mmtpa. Pluto LNG T1 first LNG sales are expected from March 2012. Pluto LNG T-2, Browse LNG and Sunrise FLNG represent additional potential LNG developments currently undergoing evaluation.
Statement of Risk We believe the potential risks in the energy sector include, but are not limited to, the volatile nature of commodity prices and currencies, which may differ materially from expectations. Furthermore, the sector is exposed to political, financial and operational risks, each of which may have the potential to significantly impact company/industry performance.
UBS 64
ab
UBS Investment Research Caltex Australia Limited
Refiner margin update (Dec 2011)
Dec CRM of US$7.92bbl; 2011 average CRM US$7.98/bbl The Caltex Refiner Margin (CRM) realised for Dec averaged $7.92/bbl. This was in line with our expectation (1.4% below pcp), but 42% above the Nov CRM realised. The unlagged Singapore Weighted Average Margin (SWAM) was also US$11.46/bbl (Nov: US$10.54/bbl). Improved gasoline margins The realised CRM benefited from a US$0.75/bbl positive lag (falling Brent price and higher A$). Also, gasoline (petrol) margins improved due to regional rate cuts, but middle distillate (diesel) suffered from the warm northern hemisphere winter. The Brent-Dubai spread is narrowing (this is good) as Libyan production returns. Neutral rating maintained Overall, there is no change to our forecasts as the Dec refiner margin realised by Caltex is in line with our view. We are increasingly taking the view that Caltex may close its refining operations, subject to sourcing efficient and reliable product (mainly gasoline) that meets Australian standards. Valuation: NAV of $10.43, DCF at 10% Our Caltex share price target of $12.42 is based on our NAV estimate (DCF, using a nominal 10% discount rate), plus a risk weighted preliminary value for the Caltex marketing business that reflects a potential exit from refining.

RIC: CTX.AX BBG: CTX AU
Neutral *
Unchanged
1 February 2012
Trading data (local/US$) 52-wk range Market cap. Shares o/s Free float Avg. daily volume ('000) Avg. daily value (m) Balance sheet data 12/11E Shareholders' equity P/BV (UBS) Net Cash (debt) Forecast returns Forecast price appreciation Forecast dividend yield Forecast stock return Market return assumption Forecast excess return EPS (UBS, A$) 12/11E H1 H2E 12/11E 12/12E UBS 0.42 0.55 0.97 1.06 Cons. 1.08 1.17 12/10 Actual 0.61 0.57 -2.4% 4.2% +1.8% 8.6% -6.8% A$3.25bn 1.1x (A$0.64bn) A$16.16-9.45/US$16.37-9.64 A$3.44bn/US$3.66bn 270m (ORD) 50% 587 A$7.5
12/09 17,738 485 324 1.20 0.25 5-yr hist av. 2.8 16.2 6.8 12.8 3.6
12/10 18,672 496 318 1.18 0.60 12/10 2.7 14.2 5.0 9.6 5.3
12/11E 22,226 427 262 0.97 0.45 12/11E 1.9 11.4 6.2 13.1 3.5
12/12E 22,045 453 287 1.06 0.54 12/12E 2.1 11.6 5.9 12.0 4.2
12/13E 22,133 636 420 1.55 0.78 12/13E 2.9 16.0 4.6 8.2 6.1
Performance (A$)
16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 01/09 04/09 07/09 10/09 01/10 04/10 07/10 10/10 01/11 04/11 07/11 10/11 01/12 0 50 100 150 Stock Price (A$) Rel. All Ordinaries 200
Source: UBS
Gordon Ramsay
Cameron Hardie
This report has been prepared by UBS Securities Australia Ltd UBS 65 SEE REQUIRED DISCLOSURES SECTION AT END OF NOTES. * Exception to core rating bands UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
Caltex Australia Limited 1 February 2012
December Caltex Refiner Margin

The Caltex Refiner Margin (CRM) realised for the month of December 2011 averaged $7.92/bbl. This is broadly in line with our expectation (1.4% below pcp), and 42% above the CRM realised in the month of November. The realised CRM benefited from a US$0.75/bbl positive lag (falling Brent price and higher A$). Also, gasoline (petrol) margins improved due to regional rate cuts, but middle distillate (diesel) suffered from the warm northern hemisphere winter. The unlagged Singapore Weighted Average Margin (SWAM) was US$11.46/bbl (Nov: US$10.54/bbl).
Chart 1: Caltex Refiner Margin (CRM) and Singapore Weighted Average Margin (SWAM)
US$/bbl
16 14
13.85 11.82 11.93 11.22 12.05 11.30 9.98
13.33 11.47 12.09 11.46 10.54
12 11.46 10 8
11.18
8.86 7.90 6.44 6.32 6.16 5.40
8.97
8.86 7.92
6 4 2 0 Jan Feb Mar Apr May Jun
5.59
Jul
Aug
Sep
Oct
Nov
Dec
SWAM (Brent based)
CRM
Source: Caltex Australia
The Brent Dubai spread narrowed in Dec to US$1.4/bbl as Libyan and other North Sea production returned into the market. Singapore product pricing is based off of the Dubai price of crude, and therefore an easing of the relatively high Brent-Dubai spread experienced over most of 2011 benefits the CRM.
Chart 2: Brent-Dubai spread (US$/bbl)
10 9 8 7 6 5 4 3 2 1 0 May-11 Mar-11 Aug-11 Dec-11 Oct-11 Feb-11 Nov-11 Apr-11 Jan-11 Sep-11 Jun-11 Jul-11 US$/bbl
UBS 66
Caltex Australia (CTX.AX)

MARKET INFORMATION Rating: Price (as of 31-Jan-12): Price Target (12 months): Issued Capital: Market Capitalisation: Avg. daily turnover (US$m) Year end: Website: Major Shareholders: INVESTMENT SUMMARY (A$m) Net profit [reported] ($m) Net profit [adjusted] ($m) EPS [reported] () EPS [adjusted, diluted] () EPS Growth (%) PER [adjusted] (x) Dividend () Payout ratio (%) Dividend Yield (%) FCF Yield (%) Franking (%) Shares [period-average, diluted] (m) VALUATION Valuation per share [NAV @10%] ($) Share Price Target [12 months] ($) Price/NAV [10% disc rate] (x) Operating Assets [JH10] Operations Other COMPANY DESCRIPTION Neutral (CBE) 12.73 12.42 270.0 3,437.1 7.4 December www.caltex.com.au Chevron 50%
Analyst/s: Gordon Ramsay; Cameron Hardie Email: Gordon.Ramsay@ubs.com 31-Jan-12 Caltex Australia (CTX) is the only Australian listed refiner, and is the number-one transport fuel PROFILE-300000855EN08022829 marketer and convenience store operator in the country. Caltex' Australian operations are focused on the downstream oil industry (refining, distribution and marketing of fuels, lubricants and a range of specialty products). Caltex owns two refineries: one at Kurnell (NSW) and the other at Lytton (Queensland). Caltex has also established a retail convenience store presence, largely in association with its service station sites and a marketing joint venture with Woolworths. ChevronTexaco owns 50% of Caltex Australia.
OPERATIONAL ASSUMPTIONS 2010 317.0 318.2 117.4 117.9 (2) 10.8 60.0 1 4.7 14.9 100 270.0 2011E 268.5 262.3 99.4 97.2 (18) 13.1 45.0 0 3.5 18.7 100 270.0 2012E 240.5 287.5 89.1 106.5 10 12.0 54.0 1 4.2 19.6 100 270.0 2013E 387.8 419.6 143.6 155.4 46 8.2 78.0 1 6.1 24.8 100 270.0 1H11 Margins Singapore Refiner Margin: US$/bbl Caltex Refiner Margin: US$/bbl Caltex Marketing Margin: US$/bbl Production Volumes: ML Gasoline Diesel Jet Fuel Total Transport Fuels (ML) Assumptions Exchange rate (A$/US$) Tapis Oil Price (US$/bbl) 11.1 7.8 6.9 2H11E 12.3 8.5 6.6 2010 13.7 8.4 5.5 5,340.6 2,934.8 1,548.3 9,823.7 0.9 79.6 2011E 11.7 8.2 6.7 5,233.1 2,878.2 1,517.6 9,628.9 1.0 111.1 2012E 12.3 7.8 6.5 2013E 11.9 7.9 6.4
2,415.6 2,817.5 1,328.6 1,549.6 700.5 817.1 4,444.7 5,184.2 1.0 111.3 1.0 110.9
5,604.4 5,589.1 3,282.4 3,299.0 1,625.3 1,620.8 10,512.1 10,508.9 1.0 105.0 1.0 97.0
10.43 12.42 1.22 A$m 3010 456 1115 169
DIVISIONAL BREAKDOWN [EBIT] (A$m)
1H11
2H11E
2010
2011E
2012E
2013E
Gross Assets Exercise Options Net Borrowings Corporate Costs Net Asset Value @ 10% discount rate ENTERPRISE VALUE (A$m) Enterprise Value EV/EBITDA (x) EV/Operating Free Cash Flow (x) EV/DACF (x) EV/2P Reserves (A$/boe) ROACE (%) EPS SENSITIVITIES Commodity Currency Oil Singapore Refiner Margin CASH FLOW (A$m) EBITDA (pre exploration expense) Depreciation & Amortisation Exploration Expenditure Net change in working capital Other (operating) Pre-tax op cash flow Interest (paid) / received Tax paid Other Operating cash flow Capital expenditure (non-maint.) Free cash flow Net (acquisitions) / disposals Dividends paid (Common) Shares issued/(repurchased)
3466 0 (650) 0 2816
1284 0 (241) 0 1043
2010 3548 5.0 5.4 5.6 9.1
2011E 4015 6.2 6.7 6.9 7.0
2012E 4056 5.9 6.4 8.5 7.3
2013E 3978 4.6 4.8 5.9 10.6
Base Change 5 10% 10%
2011E
2012E 2013E EPS Change -6.3% -7.6% -7.6% -2.2% -2.2% -2.2% 10.3% 9.8% 9.8%
2010 705 (209) 0 (210) 18 513 (58) (60) 2 396 (306) 90 19 (149) 0
2011E 646 (220) 0 0 (3) 644 (55) (170) 1 419 (350) 69 0 (127) 0
2012E 682 (230) 0 0 (9) 673 (41) (124) 0 507 (352) 156 0 (146) 0
2013E 874 (238) 0 0 (23) 851 (36) (145) 0 671 (355) 316 0 (170) 0
PROFIT & LOSS (A$m) Sales Revenue Operating Cash Profit Depn & Amortisation Operating Profit Exploration Expensed Corporate/Other Expenses EBIT Net interest Profit before tax Tax expense Equity Associated NPAT Minority Interests Dividends () Net Profit [reported] Abnormal Gain/(Loss) after Tax Net Profit [adjusted] EBITDA margin (%) Net Interest Cover [EBIT] (x) Tax Rate (%) EBIT/Total Assets (%) NPAT/Equity (%) EBIT/Avg Cap Employed (%) BALANCE SHEET [Selected Items] (A$m) Net Working capital Fixed Assets Net Other Capital Employed Net Cash / (Debt) Total Equity [incl. minorities] Minorities Net Debt / Equity (%) Book Value per Share($)
1H11 10846 333 (108) 224 0 (33) 191 (35) 382 (112) 1 0 17 270 157 113
2H11E 11380 373 (111.2) 262 0 (26) 236 (22) 106 (32) 0 0 28 (1) (151) 149
2010 18672 794 (209) 585 0 (89) 496 (57) 440 (124) 4 1 60 317 (1) 318 4.3 8.6 28.2 9.4 10.6 14.1
2011E 22226 706 (220) 486 0 (59) 427 (56) 488 (144) 1 0 45 268 6 262 3.2 7.6 29.5 7.1 8.3 11.3
2012E 22045 736 (230) 506 0 (54) 453 (41) 344 (103) 0 0 54 240 (47) 287 3.3 10.9 30.1 7.4 8.7 11.5
2013E 22133 930 (238) 691 0 (55) 636 (36) 555 (167) 0 0 78 388 (32) 420 4.2 17.8 30.1 10.3 12.2 15.9
2010 769 2975 (117) 3627 (544) 3060 (11) 17.7 11.38
2011E 1071 3085 (258) 3897 (637) 3238 (11) 19.5 12.03
2012E 1071 3207 (296) 3982 (627) 3332 (11) 18.7 12.38
2013E 1071 3323 (381) 4013 (481) 3510 (11) 13.6 13.04
Source: Company accounts, UBS estimates. UBS valuations are stated before goodwill, exceptionals and other spcieal items. Note: For some companies, the data represents an extract of the full company accounts.
Source: Company reports, UBS estimates
UBS 67
Caltex Australia Limited Caltex Australia (CTX) is the only Australian listed refiner, and is the numberone transport fuel marketer and convenience store operator in the country. Caltex' Australian operations are focused on the downstream oil industry (refining, distribution and marketing of fuels, lubricants and a range of specialty products). Caltex owns two refineries: one at Kurnell (NSW) and the other at Lytton (Queensland). Caltex has also established a retail convenience store presence, largely in association with its service station sites and a marketing joint venture with Woolworths. ChevronTexaco owns 50% of Caltex Australia.
Statement of Risk We point out to investors that we believe the potential risks in the energy sector include, but are not limited to, the volatile nature of commodity prices and currencies, which may differ marginally from expectations. Futhermore, the sector is exposed to political, and operational risks, each of which may have the potential to significantly impact company/industry performance.
UBS 68
ab
UBS Investment Research Energy Resources Aus
Production hinges on the weather
ERA reports CY11 results inline with expectations. ERA reported an underlying NPAT loss of $54m which was inline with UBSe. ERA is guiding for 2012 production to be in the range of 3-3.7kt, but this is highly dependent on the level of rainfall for the remainder of the 2011/12 wet season. Wet weather poses a risk to mining all of the Ranger pit ore reserves ERA confirmed that the Ranger Pit will cease mining at the end of CY12. There is 3.36Mt of ore remaining in the pit while in the last 7 years ERA have mined more than 3Mtpa in only 2 years. In CY10 & CY11, ERA mined a total of 2.6Mt of ore (1.3Mtpa), indicating the impact wet weather can have on production. Rainfall in the 11/12 wet season has been above average to date, with 2 or so months of the wet season remaining. If ERA cannot mine all of the reserves in CY12, then they will likely be sterilised as the pit is prepared for rehabilitation in CY13. Downgrade to Sell. Weather risk to prevent near term outperformance We believe ERA will continue to trade closer to a conservative No Ranger 3 Deeps value for the next 12 months than the upside potential posed by the development of the project as viability will take time to assess. Our base case valuation with no Ranger 3 Deeps is $0.37ps, while if Ranger 3 Deeps goes ahead, our valuation would rise to $2.71ps. Valuation: $0.37 (DCF, 10% d.r.), assumes no Ranger 3 Deeps We have set our price target at $1.15ps (prev $1.30ps), which is based on a 1/3 weighting of our upside case ($2.71) and 2/3 of the downside case ($0.37ps).

Australia Mining 12-month rating 12m price target Price
RIC: ERA.AX BBG: ERA AU
Sell
Prior: Neutral
A$1.15/US$1.22 Prior: A$1.30/US$1.38 A$1.33/US$1.42
1 February 2012
Trading data (local/US$) 52-wk range Market cap. Shares o/s Free float Avg. daily volume ('000) Avg. daily value (m) Balance sheet data 12/11E Shareholders' equity P/BV (UBS) Net Cash (debt) Forecast returns Forecast price appreciation Forecast dividend yield Forecast stock return Market return assumption Forecast excess return EPS (UBS, A$) From (0.12) (0.06) (0.20) (0.22) 12/11E To (0.12) (0.06) (0.17) (0.25) Cons. (0.15) (0.06) 12/10 Actual 0.12 0.13 -13.5% 0.0% -13.5% 8.6% -22.1% A$1.29bn 0.3x A$0.63bn A$7.67-1.15/US$7.76-1.18 A$0.43bn/US$0.46bn 327m (ORD) 32% 1,914 A$2.8
12/09 781 375 273 1.43 0.39 5-yr hist av. 28.6 24.1 16.9 29.6 1.8
12/10 586 48 47 0.25 0.08 12/10 8.1 6.5 25.2 41.0 0.8
12/11E 668 (49) (54) (0.17) 0.00 12/11E -7.4 (6.9) -2.8 NM 0.0
12/12E 456 (194) (128) (0.25) 0.00 12/12E -42.5 (30.2) -5.4 NM 0.0
12/13E 477 (148) (101) (0.19) 0.00 12/13E -31.0 (24.7) -1.0 NM 0.0
H1 H2E 12/11E 12/12E
Performance (A$)
20.0 Stock Price (A$) Rel. All Ordinaries 160 140 15.0 10.0 120 100 80 60 5.0 40 20 0.0 01/09 04/09 07/09 10/09 01/10 04/10 07/10 10/10 01/11 04/11 07/11 10/11 01/12 0
Source: UBS
Source: Company accounts, Thomson Reuters, UBS estimates. (UBS) valuations are stated before goodwill, exceptionals and other special items. Valuations: based on an average share price that year, (E): based on a share price of A$1.33 on 01 Feb 2012 19:17 EST
Glyn Lawcock
Analyst glyn.lawcock@ubs.com +61-2-9324 3675
Daniel Morgan
Analyst daniel.morgan@ubs.com +61-2-9324 3844
Jo Battershill
Analyst jo.battershill@ubs.com +61-2-9324 2834
Energy Resources Aus 1 February 2012
ERA reports CY11 results

ERA reported an underlying NPAT loss of $54m which was inline with our estimates and consensus (we believe consensus was a $50-55m loss with range of $35-70m loss). Sales volumes were 15% ahead of UBSe, but as this increased the need for uranium purchases, this was not a net driver of difference to earnings vs UBSe. Free cashflow was -$42m, below UBSe of -$5m, driven by higher working capital than we forecast, mostly inventory. Capex was inline with UBSe at $97m. As a result of lower cashflow, net cash as at 31 Dec 2011 was $633m, below UBSe of $670m. ERAs cash position was boosted during the period by the rights issue which raised a net $488m.
Table 1: ERA full year results summary
2008 Spot Uranium Realised Uranium A$:US$ Production Sales :US$/lb :US$/lb :US$ :t :t 64.38 32.55 0.84 5,340 5,272 2009 46.66 50.84 0.79 5,240 5,497 2010 45.99 47.92 0.92 3,793 5,026 2011 56.20 59.32 1.03 2,641 5,167 y/y 22% 24% 12% -30% 3% UBSe 56.22 60.33 1.03 2,641 4,500 a/e 0% -2% 0% 0% 15%
Revenue from sales of Uranium COGS Cash costs EBITDA D&A EBIT Finance costs (revenue) PBT Tax Underlying Net Profit Abnormal items Reported Net Profit
:A$m :A$m :A$/lb :A$m :A$m :A$m :A$m :A$m
496 278 23.9 218 47 171 5 166
766 325 26.8 441 67 375 -7 382
572 463 41.8 108 61 48 -12 59
649 573 50.3 77 126 -49 -15 -64 10
14% 24% 20% -29% 107% -203% 28% -208%
579 539 54.4 40 127 -87 -3 -84 30
12% 6% -8% 93% -1% -44% 404% -24%
:A$m
119 103 222
273 0 273
47 6 53
-54 -99 -154
-215% -1816% -391%
-55 -99 -154
-1% 0% 0%
Underlying EPS DPS Free cashflow Net Debt / (Cash) Source: ERA and UBS estimates
:A$ps :A$ps :A$m :A$m
0.62 0.28 241 -107
1.43 0.39 212 -254
0.25 0.08 -3 -188
-0.17 0.00 -42 -633
-169% -100% 1443% 237%
-0.20 0.00 -5 -670
-15%
795% -6%
The provision for closure has been increased to $565m NPV (was $550m as at 4 Aug 2011). This is being continually reviewed by ERA and they maintained that this is subject to a -15% +30% order of magnitude level of accuracy.
UBS 70
No dividend was declared as expected. ERA also confirmed on the conference call that given the capital spending and closure provision, it is unlikely dividends will be declared in the near future.
Rainfall the key risk to production near term

On the conference call, ERA confirmed that the Ranger Pit will cease mining prior to the onset of the 2012/13 wet season. This is likely to be at the end of CY12, but if weather were to allow it, ERA may be able to mine some ore in January 2013. The pit needs to be closed to enable it to be prepared to accept tailings and to be filled in. Ore Reserves that are not mined during the next 12 months are in ERAs view likely to be sterilised and lost forever. ERA has 3.36Mt of ore remaining in the Ranger pit, with 2.7Mt of proven reserves at 0.22% grade and 0.7Mt of probable reserves at 0.08% grade. On the conference call, ERA said that they were hopeful of being able to mine the reserve, but that wet weather posed issues for access to the pit. As shown in Chart 1, ore mined has exceeded 3Mtpa historically in 2006 and 2008, however wet weather impacted ore mining in both 2010 and 2011, demonstrating risk to ERA mining all the reserves.
Chart 1: Comparison of historic ore mined (Mtpa) vs Ranger pit reserves (Mt)
4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2005 Ore mined
Source: ERA
2006
2007
2008
2009
2010
2011
2012
Prov ed Reserv es (0.22%)
Probable Reserv es (0.08%)
As shown in Chart 3, rainfall during the 2011/12 wet season has been above average to date. In years of abnormally high rainfall, heavy rains typically fall in the months of February and March. Thus it will be a month or two before ERA can assess the impact of rainfall on the ability to mine the reserves.
UBS 71
Chart 2: Ranger cumulative rainfall
Source: ERA
Guidance
ERA guiding for 2012 production to be in range of 3,000-3,700t (UBSe prior to today was 3,700). Actual production will remain highly dependent on the level of rainfall for the remainder of 2011/12 wet season. Shipments in 2012 are expected to be broadly in line with production. We believe ERA may have contracts for ~3,400t. Average realised price expected to be inline with that achieved in 2011, but remains subject to changes in both short and long term price indicators (UBSe for CY12 is US$62/lb vs US$59/lb in CY11).
UBS 72
Earnings changes
We have reduced our estimated production for CY12 to 3.4kt (from 3.7kt). This causes a 64% downgrade to our EBITDA estimate for CY12. We have marginally cut our CY16 production to 1.39kt from 1.5kt previously.
Chart 3: UBSe production vs ERA guidance
4 kt 3 ERA Guidance Range UBS Production
0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: ERA and UBSe.
Table 2: Summary of earnings changes

New A$m Spot Uranium (US$/lb) Realised Uranium (US$/lb) A$:US$ Production (kt) 2012e 55 62 100 3.4 Prev. 2012e 55 62 100 3.7 % Change 0% 0% 0% -9% New 2013e 60 64 96 3.2 Prev. 2013e 60 64 96 3.2 % Change 0% 0% 0% 0% New 2014e 65 67 90 2.6 Prev. 2014e 65 67 90 2.6 % Change 0% 0% 0% 0%
Revenue EBITDA EBIT PBT Underlying Net Profit Abnormal items Reported Net Profit
456 23 -194 -187 -128 0 -128
502 64 -173 -166 -112 0 -112
-9% -64% 12% 13% 14% NM 14%
477 95 -148 -149 -101 0 -101
477 95 -148 -147 -100 0 -100
0% 0% 0% 1% 1% NM 1%
418 130 -102 -104 -69 0 -69
418 130 -102 -102 -68 0 -68
0% 0% 0% 2% 2% NM 2%
EPS (underlying) PE DPS
-24.7 -5.4 0.0
-21.7 -6.1 0.0
14% -12%
-19.5 -6.8 0.0
-19.2 -6.9 0.0
1% -1%
-13.3 -10.0 0.0
-13.1 -10.1 0.0
2% -2%
NPV Source: UBS estimates
0.37
0.60
-38%
0.46
0.60
-23%
0.56
0.69
-19%
UBS 73
The lower than expected cash balance, the downgrade to 2012 earnings estimates and the reduction in our CY16 production causes a 38% downgrade to our NPV to $0.37ps. Our base case ERA model assumes Ranger 3 Deeps is not approved (due to not being economic or not having stakeholder support) and the valuation is highly sensitive to any changes in assumptions. We also run an upside model, where Ranger 3 Deeps is approved after being proven to be economic and attracting stakeholder support. The change to the NPV is -3% to $2.71ps.
Investment view
An investment in ERA is dependent on: 1) Ranger 3 Deeps being proved to be economic; and 2) stakeholder support for the project. We believe there is no guarantee that stakeholder support for the underground will be forthcoming, and comments to date from the Mirrar People (traditional owners) does not paint a supportive picture, in our view (although ERA continue to suggest engagement is improving). Should Ranger 3 Deeps proceed, we value ERA at $2.71ps. If Ranger 3 Deeps were not to proceed, then our NPV is $0.37ps. In the near term, news flow is likely to be limited to quarterly production updates, with little in the way of updates on the underground viability until the decline is complete and drilling commences in June 2013. Thus, with a 12month view, we believe the market is more likely to trade the stock closer to a conservative no Ranger 3 Deeps valuation than bake in the upside options. Furthermore, for the next 2-3 months the wet season (which has seen above average rainfall to date) may reduce ERAs access to the pit during CY12. This may make mining the full 3.36Mt of reserves difficult before mining ceases in the pit at the end of CY12. We downgrade our rating on ERA to Sell (from Neutral), with a $1.15ps price target (was $1.30ps).
UBS 74
Energy Resources Aus (ERA.AX)

MARKET INFORMATION Rating: Price (as of 01-Feb-12): Price Target (12 months): Issued Capital: Market Capitalisation: Avg. daily turnover (US$m) Year end: Website: Major Shareholders: INVESTMENT SUMMARY (A$m) Net profit [reported] ($m) Net profit [adjusted] ($m) EPS [reported] ($) EPS [adjusted, diluted] ($) EPS Growth (%) PER [adjusted] (x) Dividend ($) Payout ratio (%) Dividend Yield (%) FCF Yield (%) Franking (%) Shares [period-average, diluted] (m) VALUATION Valuation per share [NAV @ 10%] ($) Share Price Target [12 months] ($) Price/NAV [10% disc rate] (x) Operating Assets [JH09] Ranger Jabiluka COMPANY DESCRIPTION Sell 1.33 1.15 327.0 503.5 2.9 Dec 2011 http://www.energyres.com.au Rio Tinto Investments 68.4%
Analyst/s: Glyn Lawcock; Daniel Morgan Email: daniel.morgan@ubs.com 01-Feb-12
Energy Resources of Australia is a miner and producer of uranium oxide. It is 68.4%-owned by Rio Tinto. ERA is currently mining and milling ore from the No. 3 orebody on the Ranger lease. The company has now received all the appropriate commonwealth government approvals for the Jabiluka uranium mine; however, the mine site is currently on care and maintenance as the company is not prepared to proceed with the project without support from the traditional landowners. ERA exports to Asia, Europe and North America.
OPERATIONAL ASSUMPTIONS 2010 53 47 0.28 0.25 (82.8) 5.4 0.1 32% 6% 26.3 0.0 190.7 2011E (154) (54) (0.48) (0.17) NM <0.0 0.0 0% 0% (13.8) 0.0 317.4 2012E (128) (128) (0.25) (0.25) (44.5) <0.0 0.0 0% 0% (14.5) 0.0 517.7 2013E (101) (101) (0.19) (0.19) 21.0 <0.0 0.0 0% 0% 5.8 0.0 517.7 1H11 Assumptions Uranium price (Spot) US$/lb Uranium price (realised) US$/lb 60.2 60.6 2H11E 52.2 57.9 2010 46.0 47.3 2011E 56.2 59.2 2012E 55.0 61.5 2013E 60.0 64.0
Production Ranger Production (t) Ranger Sales (t) Ranger Production (Mlbs) Ranger Sales (Mlbs)
601 1,825 1.3 4.0
2,040 3,342 4.5 7.4
3,793 5,026 8.4 11.1
2,641 5,167 5.8 11.4
3,364 3,364 7.4 7.4
3,247 3,247 7.2 7.2
0.37 1.15 3.59 A$m 41 8 -
DIVISIONAL BREAKDOWN [EBIT] (A$m)
1H11
2H11E
2010
2011E
2012E
2013E
Gross Assets
41 -
Closure costs Net Cash Corporate costs Net Asset Value @ 10% discount rate ENTERPRISE VALUE (A$m) Enterprise Value EV/EBITDA (x) EV/Operating Free Cash Flow (x) EPS SENSITIVITIES Commodity Spot uranium price AUDUSD
313 633 87 192
60 122 17 37
2010 2,737 25.2 50.3
2011E 24 0.3 <0
2012E 116 5.0 <0
2013E 149 1.6 9.7
Base Change US$5/lb +/- 5c
2011E
2012E 2013E EPS Change -19.7% -24.8% -12.1% -16.5%
PROFIT & LOSS (A$m) Sales Revenue Operating Cash Profit Depn & Amortisation Operating Profit Exploration SGA EBIT Net interest Profit before tax Tax expense Equity Associated NPAT Minority Interests Dividends [preferred] Net Profit [reported] Abnormal Gain/(Loss) after Tax Net Profit [adjusted] EBITDA margin (%) Net Interest Cover [EBIT] (x) Tax Rate (%) EBIT/Total Assets (%) NPAT/Equity (%)
1H11 245 (16) (17) (33) 0 (9) (42) 6 (36) 13 0 0 0 (122) (99) (22)
2H11E 423 115 (109) 6 0 (13) (7) (21) (28) (3) 0 0 0 (32) 0 (32)
2010 586 165 (61) 104 0 (57) 48 12 59 (12) 0 0 0 53 6 47 18.5 4.1 20.9 3.4 4.9
2011E 668 99 (126) (27) 0 (22) (49) (15) (64) 10 0 0 0 (154) (99) (54) 11.5 3.3 NM (2.5) (4.2)
2012E 456 87 (217) (130) 0 (63) (194) 6 (187) 60 0 0 0 (128) 0 (128) 5.1 (31.4) NM (10.6) (11.0)
2013E 477 185 (242) (57) 0 (90) (148) (1) (149) 48 0 0 0 (101) 0 (101) 19.9 99.5 NM (8.5) (9.5)
CASH FLOW (A$m) Operating income [EBIT, UBS] Depreciation & Amortisation Net change in working capital Other (operating) Pre-tax op cash flow Interest (paid) / received Tax paid Other Operating cash flow Capital expenditure Free cash flow Net (acquisitions) / disposals Dividends paid (Common) Shares issued/(repurchased)
2010 48 61 1 0 109 8 (5) 0 112 (45) 67 0 (63) 0
2011E (49) 126 (44) 0 33 10 (4) 0 39 (97) (58) 0 0 0
2012E (194) 217 43 0 66 32 0 0 98 (198) (100) 0 0 0
2013E (148) 242 (42) 0 52 24 0 0 76 (37) 40 0 0 0
BALANCE SHEET [Selected Items] (A$m) Net Working capital Fixed Assets Net Other Capital Employed Net Cash / (Debt) Total Equity [incl. minorities] Minorities Net Debt / Equity (%) Book Value per Share($)
2010 103 539 121 763 188 951 0 (19.7) 3.30
2011E 80 741 (165) 656 633 1289 0 (49.1) 4.06
2012E 21 722 (115) 628 533 1161 0 (45.9) 2.24
2013E 15 599 (45) 570 490 1060 0 (46.2) 2.05
Source: UBSe.
UBS 75
Energy Resources of Australia Limited Energy Resources of Australia is a miner and producer of uranium oxide. It is 68.4%-owned by Rio Tinto. ERA is currently mining and milling ore from the No. 3 orebody on the Ranger lease. The company has now received all the appropriate commonwealth government approvals for the Jabiluka uranium mine; however, the mine site is currently on care and maintenance as the company is not prepared to proceed with the project without support from the traditional landowners. ERA exports to Asia, Europe and North America.
Statement of Risk Investment risk inherent in the resource sector includes, but it is not limited to, movements in commodity price and currency which may differ materially from the assumption used in this report. Furthermore, the sector is subject to political, financial and operational risks, each of which has the potential to significantly impact company/industry performance.
UBS 76
ab
UBS Investment Research Tap Oil Limited
Dec Qtr: Tallaganda drilling in Feb
Sales revenue impacted by no Woollybutt liftings in the Dec qtr Tap sales revenue was $9.4m below our forecast due to no oil liftings from Woollybutt in the qtr and only two liftings from Harriet. Production of 191 kboe was in line with the Sept qtr but below our forecast due to mechanical problems at Woollybutt. Woollybutt production will cease in April 2012. 2011 EPS reduced on lower than expected sales revenue The lower than forecast Dec qtr sales revenue has reduced our 2011 EPS forecast by 61%. Our 2012 EPS forecast reduces by 2.6% due to the deferral of 4Q11 Woollybutt liftings until 2012 being more than offset by Woollybutt production finishing one month sooner than we had forecast. A minor change to our sales revenue forecast has reduced our 2013 EPS forecast by 6.7%. Outlook A final investment decision to develop the Manora oil field is expected to be made in mid 2012, with first production expected in early 2014 at a peak rate of around 15 kbbl/d (gross). The Tallaganda-1 well in WA-351-P is targeting a prospective resource of 0.8 1.3 Tcf and is expected to commence drilling in late Feb 12. Valuation: $1.00 (prior $1.02) DCF at 10% Our NAV estimate is based on DCF using a 10% nominal discount rate of forecast cash flows over the 2P reserve life of producing assets plus the Manora development. Our share price target is based on our NAV plus exploration upside potential.

RIC: TAP.AX BBG: TAP AU
Buy
Unchanged
1 February 2012
Trading data (local/US$) 52-wk range Market cap. Shares o/s Free float Avg. daily volume ('000) Avg. daily value (m) Balance sheet data 12/11E Shareholders' equity P/BV (UBS) Net Cash (debt) Forecast returns Forecast price appreciation Forecast dividend yield Forecast stock return Market return assumption Forecast excess return EPS (UBS, A$) From 0.00 0.04 0.04 0.04 12/11E To 0.00 0.01 0.01 0.04 Cons. 0.00 0.01 12/10 Actual (0.12) (0.01) +51.3% 0.0% +51.3% 8.6% +42.7% A$0.24bn 0.8x A$0.09bn A$1.16-0.56/US$1.16-0.55 A$0.19bn/US$0.20bn 241m (ORD) 100% 400 A$0.3
12/09 58.02 (9.65) (5.63) (0.04) 0.00 5-yr hist av. -11.6 (5.7) 7.3 24.1 0.0
12/10 73.61 (30.40) (19.88) (0.12) 0.00 12/10 -41.3 (21.2) -36.7 NM 0.0
12/11E 63.64 2.38 3.39 0.01 0.00 12/11E 3.7 1.8 3.9 55.5 0.0
12/12E 66.34 9.47 8.82 0.04 0.00 12/12E 14.3 5.9 4.5 21.3 0.0
12/13E 55.05 (7.02) (3.70) (0.02) 0.00 12/13E -12.7 (3.7) 25.3 NM 0.0
H1 H2E 12/11E 12/12E
Performance (A$)
1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 01/09 04/09 07/09 10/09 01/10 04/10 07/10 10/10 01/11 04/11 07/11 10/11 01/12 Stock Price (A$) Rel. All Ordinaries 140 120 100 80 60 40 20 0
Source: UBS
Gordon Ramsay
Cameron Hardie
Tap Oil Limited 1 February 2012
Quarterly Production Report (Dec 11)

Tap Oil Actual Result 4Q10 Sales Revenue (A$m) Sales Volume (mmboe) Production Volume (mmboe) Oil Price (A$/bbl) Source: Company reports, UBS estimates 24.8 0.48 0.33 90 1Q11 10.3 0.33 0.23 118 2Q11 13.3 0.36 0.23 115 3Q11 28.7 0.51 0.19 116 4Q11 est. UBS f'cst 20.6 0.43 0.24 112.4 4Q11 Actual 11.2 0.31 0.19 117.0
Summary
Tap Dec qtr sales revenue was $9.4m below our forecast due to no oil liftings from Woollybutt in the qtr and only two liftings from Harriet. Production of 191 kboe was in line with the Sept qtr but below our forecast due to mechanical problems at Woollybutt. Woollybutt production will cease in April 2012.
Sales revenue of A$11.2m (includes A$0.8m tolling revenue) was 61% below
the Sept qtr due to reduced oil sales from both Woollybutt and Harriet in the Dec qtr plus lower third party gas sales.
Production volume of 0.191 mmboe (after losses, fuel and flaring) was in-line
with the Sept qtr and was split 63% gas and 37% liquids. Production volumes were affected by a mechanical problem in the Woollybutt-1 well in November.
Sales volume of 0.31 mmboe (includes 3 party) was 39% below the Sept 11
rd
qtr due to one less oil lifting at Harriet and no liftings at Woollybutt relative to the Sept qtr. Taps oil inventory has increased from 25.6 kbbls at the end of the Sept qtr to 72.9 kbbls at the end of Dec.
Assets / Operations
Woollybutt (Tap 15%) production averaged 2,375 bopd (gross), down 24% from the Sept qtr. in line with the June 11 qtr. Woollybutt-1 was shut in from November due to a mechanical issue. Oil production is expected to finish in April in preparation for the FPSO contract terminating in May 2012. We expect production will be lower in the Mar 12 qtr. Harriet area (Tap 12.2%) liquid production averaged 3,377 bopd (gross), and was up 4.6% in comparison to the Sept 11 qtr. Gas production from Harriet of 72.5 TJ/day (gross) was up 10% from the Sept qtr.
Major customers were not able to take their contractual volumes in November. As a result approx $1.1m in revenue was deferred under take-or-pay arrangements. Tap continues to forecast third party gas revenues of around $30m per year until 2016 when the contracts roll off.
Finucane South (Tap 8.2%): Post qtr, Tap sold its 8.2% stake in WA-191-P to Santos for $21.7m, including a balance of $3.7m on cash already spent by Tap on the development. The sale price equates to around $15 - $20/bbl, which is in the benchmark range for he sale of pre-FID 2P liquids reserves. Cash position. At 31 Dec 2011, Tap had A$81.9m in cash and no debt. The
Third party gas.
final instalment of US$10m from the sale of WA-351-P to BHP Billiton was received during the Dec qtr.
UBS 78
Legal proceedings
The trial of preliminary issues dealing with core aspects of the gas sale agreement dispute with Burrup Fertilisers took place over 13-15 Sept 2011 and Tap is awaiting the decision. Separately in late Dec Tap announced that Burrup (through its receivers and managers) breached the confidentiality regime contained in the Harriet gas sales agreement (GSA). Tap is therefore seeking declaration from the Supreme Court that this disclosure is a failure to meet obligations under the Harriet JV GSA, and that the JV is entitled to terminate the GSA.
Alcoa claim. Alcoa is seeking liquidated damages in the Supreme Court of Gas sales agreement with Burrup Fertilisers.
Western Australia of A$69,056 against Tap and also has a claim for general damages of A$158m against the HJV in relation to the interruption to gas supply resulting from the Varanus Island incident in June 2008. The application was heard in late October and Tap is awaiting the Supreme Court decision.
Capital Expenditure
Tap spent A$1.6m on capex during the Dec qtr. The majority of this spend related to the HJV project.
Manora (Tap 30%) During the Dec qtr Pearl Energy (Operator) finalised its
development plan for Manora. As a result, Tap booked an initial 6.1 mmbbls (net) of 2P reserves at Manora. The Manora development is on schedule with production expected to commence in early 2014 with peak production reaching 15 kbbl/d (gross). Tap considers the use of water flood will likely boost field oil recovery to 31.1 mmbbls (9.3mmbbls net Tap). A final investment decision to develop the Manora oil field offshore Thailand is expected to be made in mid 2012.
WA-290-P (Tap 10%): Processing of a new 3D seismic survey over Zola is
now expected to be completed by late 3Q 2012 (prior May 2012). Tap then expects an appraisal well will be drilled in late 2012, with the drilling of an appraisal well expected to follow in late 2012. Tap is seeking to sell its stake in Zola and has engaged Miro Advisors to run a formal bid process for its 10% interest.
Exploration
Tap spent $12.9m on exploration over the Dec qtr. The bulk of this spend was related to seismic on Manora and FEED studies on WA-191-P.
WA-351-P (Tap 20%): Over 10 prospects and leads have been identified in the Triassic Mugaroo formation with combined unrisked mean potential to contain 2-3 TCF (gross). Tap believes a number of these targets have a high chance of success and this is reinforced by Hesss 13 gas discoveries from 16 exploration wells in the WA-390-P permit, immediately north of WA-351-P. The Tallaganda-1 well budget was approved by the JV during the Dec qtr. Tallaganda-1 is the next well in the secured rigs schedule following BHPs Scarborough Notrth-1 well. At this stage, Tallaganda-1 is expected to commence drilling in late Feb (Tap is carried for US$10m).
UBS 79
Ghana Accra Area (Tap 45%): Taps increased equity position (40% =>
45%) in the Area announced in the Sept qtr still remains subject to approval by GNPC. Tap interprets several prospects and leads with unrisked potential of more than 3bn barrels. The first well (3Q/4Q 2012) will likely target a large deep water prospect with 500 mmbbls potential that is thought to be similar in nature to the giant Kosmos Energy / Tullow Jubilee oil field discovery (1.2 bn bbls). Tap is seeking to farm out a portion of its 45% equity stake in the Accra Contract Area.
Table 1: Comparative analysis of UBS estimates versus reported numbers
UBS Dec '11 Qtr Production Sales gas (PJ) Oil & Condensate (mmbbl) Harriet Woollybutt sub-total (mmbbl) Total production (mmboe) Sales revenue (A$M) Sales gas Oil & Condensate Tolling Total sales revenue Source: Company reports, UBS estimates 9.4 9.7 1.4 20.6 8.1 2.3 0.8 11.2 -1.4 -7.4 -0.6 -9.4 -15% -76% -42% -46% 0.04 0.04 0.09 0.24 0.04 0.03 0.07 0.19 -0.01 -0.01 -0.02 -0.05 -16% -21% -18% -20% 1.03 0.82 -0.22 -21% Estimate Tap Oil Actual Actual vs. Estimate % Difference
Forecast earnings changes

The lower than forecast Dec qtr sales revenue has reduced our 2011 EPS forecast by 61%. Our 2012 EPS forecast reduces by 2.6% due to the deferral of 4Q11 Woollybutt liftings until 2012 being more than offset by Woollybutt production finishing one month sooner than we had forecast. A minor change to our sales revenue forecast has reduced our 2013 EPS forecast by 6.7%.
Table 2: Summary of forecast earnings changes
New Financials A$m Revenue EBITDA EBIT PBT Net Profit (pre-abnormals) EPS (pre-abnormals) Ac DPS Ac Source: UBS estimates 2011E 63.6 24.3 2.4 3.9 3.4 1.4 0.0 Prev. 2011E 73.0 32.6 9.8 11.3 8.6 3.6 0.0 % Change -12.9% -25.6% -75.8% -65.9% -60.6% -60.6% New 2012E 66.3 24.1 9.5 11.5 8.8 3.7 0.0 Prev. 2012E 67.8 25.2 9.7 11.8 9.0 3.8 0.0 % Change -2.1% -4.6% -2.2% -2.6% -2.6% -2.6% New 2013E 55.0 5.3 -7.0 -5.3 -3.7 -1.5 0.0 Prev. 2013E 57.2 7.0 -6.9 -5.0 -3.5 -1.4 0.0 % Change -3.8% -23.6% -2.1% -6.7% -6.7% -6.7% -
UBS 80
Tap Oil Ltd

MARKET INFORMATION Rating: Price (as of 31-Jan-12): Price Target (12 months): Issued Capital: Market Capitalisation: Avg. daily turnover (US$m) Year end: Website: Major Shareholders: INVESTMENT SUMMARY (A$m) Net profit [reported] ($m) Net profit [adjusted] ($m) EPS [reported] () EPS [adjusted, diluted] () EPS Growth (%) PER [adjusted] (x) Dividend () Payout ratio (%) Dividend Yield (%) FCF Yield (%) Franking (%) Shares [period-average, diluted] (m) VALUATION Valuation per share [NAV @10%] ($ Share Price Target [12 months] ($) Price/NAV [10% disc rate] (x) Operating Assets [JH10] Woollybutt Harriet John Brookes Gas Contracts Manora (Thailand) Gross Assets Net Cash (Debt) Corporate Costs Net Asset Value @ 10% discount rate COMPANY DESCRIPTION Buy 0.78 1.18 241.0 188.0 0.3 December www.tapoil.com.au Northern Gulf Petroleum (5.56%) 2010 (61) (20) (12) (10.7) (7.3) 0.0 0% 2% 0% 186.5 1.00 1.18 0.78 2011E 5 3 1 1.4 -113% 55.5 0.0 0% -29% 0% 241 2012E 9 9 4 3.7 160% 21.3 0.0 0% -7% 0% 241 2013E (4) (4) (2) (1.5) -142% (50.7) 0.0 0% -20% 0% 241
Analyst/s: Gordon Ramsay; Cameron Hardie Email: Gordon.Ramsay@ubs.com 31-Jan-12 Tap Oil's core production assets are located in the Apache-operated Harriet area and at PROFILE-300000855EN08022829 the Woollybutt oil field in the offshore Carnarvon Basin, Western Australia. Both areas are considered to be mature and have experienced disruptions to production (Varanus Island fire and FPSO related). Onshore Brunei has redevelopment potential. Tap is seeking to farm out in the offshore Philippines block SC-41 (50% and operator).
OPERATIONAL ASSUMPTIONS 2H11E 1H12E Production Gas (PJ) 1.6 2.1 LNG (mmt) 0.0 0.0 Condensate (mmbbl) 0.0 0.0 0.0 0.0 LPG (kt) Oil (mmbbl) 0.2 0.1 Total Production (mmboe) 0.6 0.5 Production Rates Gas production rate (TJ/d) Cond. production rate (kbbl/d) Oil production rate (kbbl/d) Total production rate (kboe/d) Assumptions Brent Oil Price (US$/bbl) A$/US$ exchange rate 8.5 0.0 0.8 3.4 110.9 1.03 11.6 0.0 0.6 2.5 107.5 1.00
2010 4.1 0.0 0.0 0.0 0.5 1.2 11.3 0.0 1.3 3.2 79.6 0.92
2011E 3.6 0.0 0.0 0.0 0.3 0.8 9.8 0.0 0.8 2.3 111.1 1.03
2012E 4.4 0.0 0.0 0.0 0.2 0.8 11.9 0.0 0.5 2.3 105.0 1.00
2013E 3.5 0.0 0.0 0.0 0.1 0.7 9.6 0.0 0.4 1.8 97.0 0.96
A$m 6 55 61 72 193 86 (39) 240
3 23 25 30 80 36 (16) 100
DIVISIONAL BREAKDOWN [EBIT] (A$m) 2H11E 1H12E Woollybutt 4 4 Harriet 2 (1) John Brookes Gas Contracts 10 10 Manora (Thailand) 0 0
2010 9 (11) 16 0
2011E (1) (4) 18 0
2012E 4 0 20 0
2013E 0 1 20 0
ENTERPRISE VALUE (A$m) Enterprise Value EV/EBITDA (x) EV/Operating Free Cash Flow (x) EV/DACF (x) EV/2P Reserves (A$/boe) EPS SENSITIVITIES Commodity Currency Oil CASH FLOW (A$m) EBITDA (pre exploration expense) Depreciation & Amortisation Exploration Expenditure Net change in working capital Other (operating) Pre-tax op cash flow Interest (paid) / received Tax paid Other Operating cash flow Capital expenditure (non-maint.) Free cash flow Net (acquisitions) / disposals Dividends paid (Common) Shares issued/(repurchased)
2010 89 -38.8 1.8 -6.0 31.5
2011E 102 4.2 10.1 3.9 11.5
2012E 116 4.8 3.4 3.7 12.7
2013E 154 28.8 5.4 5.7 18.7
Base Change +5 +10%
2011E 0.0% 0.0%
2012E 2013E EPS Change -13.7% -23.8% 20.1% 29.2%
2010 31 (28) (33) 22 53 3 (6) 0 50 (46) 4 0 0 55
2011E 31 (22) (6) (15) 16 2 (8) 0 10 (65) (55) 0 0 0
2012E 34 (15) (10) 0 34 2 (3) 0 34 (48) (14) 0 0 0
2013E 25 (12) (20) 0 25 2 2 0 29 (66) (37) 0 0 0
PROFIT & LOSS (A$m) 2H11E 1H12E Sales Revenue 40 37 Operating Cash Profit 26 24 (9) (9) Depn & Amortisation Operating Profit 17 15 (8) (5) Exploration Expensed (5) (5) Corporate/Other Expenses EBIT 4 6 0 1 Net interest Profit before tax 5 7 Tax expense (1) (2) Equity Associated NPAT 0 0 Minority Interests 0 0 0 0 Dividends () Net Profit [reported] 13 5 Abnormal Gain/(Loss) after Tax 9 0 Net Profit [adjusted] 3 5 EBITDA margin (%) Net Interest Cover [EBIT] (x) Tax Rate (%) EBIT/Total Assets (%) NPAT/Equity (%) EBIT/Avg Cap Employed (%) BALANCE SHEET [Selected Items] (A$m) Net Working capital Fixed Assets Net Other Capital Employed Net Cash / (Debt) Total Equity [incl. minorities] Minorities Net Debt / Equity (%) Book Value per Share($)
2010 71 42 (28) 14 (33) (11) (30) 2 (28) 9 0 0 0 (61) (42) (20) 59.4 15.5 30% -10% -9% -23% 2010 (18) 187 (38) 132 99 231 0 -43% 0.96
2011E 64 40 (22) 19 (6) (10) 2 1 4 (0) 0 0 0 5 1 3 63.5 (1.6) 12% 1% 1% 2% 2011E 1 208 (60) 150 86 236 0 -36% 0.98
2012E 66 43 (15) 29 (10) (9) 9 2 11 (3) 0 0 0 9 0 9 65.0 (4.8) 23% 3% 4% 5% 2012E 1 232 (60) 173 72 244 0 -29% 1.01
2013E 55 34 (12) 21 (20) (9) (7) 2 (5) 2 0 0 0 (4) 0 (4) 61.2 4.1 30% -2% -2% -3% 2013E 1 265 (60) 207 34 241 0 -14% 1.00
Source: Company reports, UBS estimates
UBS 81
Tap Oil Limited Tap Oil's core production assets are located in the Apache-operated Harriet area and at the Woollybutt oil field in the offshore Carnarvon Basin, Western Australia. Both areas are considered to be mature and Woollybutt production is likely to end in 2012. A final investment decision to develop the Manora (Tap 30%) oil field offshore Thailand is expected to be made over 1H 2012, with first production planned in early 2014. Zola-1 (Tap 10%) offshore WA is a recent gas discovery with up to around 2 TCF potential that has multiple commercial options.
Statement of Risk The oil and natural gas markets have a history of price volatility, which is expected to continue. The volatility in oil, condensate and gas prices / volumes can have a material impact on earnings and cash flow. At times the company uses various financial instruments to manage the price risk. In addition there is risk associated with successful exploration activity required to deliver future production growth.
UBS 82
Property Trust Distribution and Valuation Sheet - Ordinary Units

Trust/Sub Indices ASX Code Index Mkt Cap ($m) S&P/ASX 200 Prop Wgt (%) Price Cum-Adj FY'12e DPS Yield 6.1 7.4 6.9 6.1 7.9 6.2 5.9 6.8 Cum-Adj FY'12e EPS Yield 8.1 10.0 7.6 7.8 7.9 8.9 9.8 8.8 PE FY12 x AFFO DCF Valn Pm/Dis DCF Valn (%) -12.1 -19.6 -19.9 -9.5 -16.4 -3.4 -13.2 -15.2 Price Target Implied Total Return Distribution per Unit 2011a 2012f 2013f (c) (c) (c) Earnings per Unit 2011a 2012f 2013f (c) (c) (c) Imp Cap rate (%) Wghted Avg Cap Rate (%) Gearing (%) NAV ($) Pm/Dis to NAV (%) Source: UBS 5 Yr DPU Next Next Growth Est. Est. ('10-'15) Ex-date DPU () Rating
2014f (c)
2014f (c)
Leaders Westfield Group # Stockland Trust Group # Westfield Retail Trust # General Property Trust # CFS Retail Property Trust # Dexus Property Group Goodman Group Mirvac Group # Diversified Stockland Trust Group # General Property Trust # Dexus Property Group Mirvac Group # Australand Property Charter Hall Group Ardent Leisure Group Thakral Holdings Group Challenger DPG Retail Westfield Group # Westfield Retail Trust # CFS Retail Property Trust # Charter Hall Retail Bunnings Warehouse Prop Office Charter Hall Office Commonwealth Prop Office # ING Office Fund Industrial Goodman Group # Mgers & Dev Leighton Holdings Limited Lend Lease Corp # FKP Limited Peet & Company Limited
WDC SGP WRT GPT CFX DXS GMG MGR
17,990.6 7,846.8 6,995.7 5,198.7 3,987.9 4,282.5 4,278.4 4,168.6
28.3 12.4 11.0 8.2 6.3 6.7 6.7 6.6
$8.47 $3.32 $2.49 $3.07 $1.69 $0.89 $0.65 $1.22
12.6 10.3 13.3 13.2 12.9 11.4 10.5 11.5
$9.63 $4.13 $3.11 $3.39 $2.02 $0.92 $0.75 $1.44
$9.50 $3.50 $2.97 $3.30 $1.95 $0.94 $0.77 $1.30
18.3% 12.9% 26.2% 13.6% 23.3% 12.4% 24.3% 13.4%
48.3 23.7 16.7 17.6 12.7 5.2 3.4 8.4
50.5 24.1 16.8 18.3 13.1 5.4 3.7 8.3
54.1 25.2 17.2 19.1 13.5 5.5 3.9 8.9
56.1 26.5 17.7 19.6 13.6 5.7 4.0 9.9
64.3 31.6 18.5 22.4 12.7 7.4 5.8 10.5
67.0 32.3 18.7 23.2 13.1 7.7 6.2 10.6
72.1 33.8 19.1 24.2 13.5 7.8 6.4 11.1
74.7 35.5 19.7 24.9 13.6 8.2 6.6 12.3
7.8 8.8 7.6 7.4 7.6 8.8 9.3 8.0
6.4 7.5 6.1 6.7 6.5 7.7 7.9 7.6
39.7 22.0 21.6 21.0 27.0 28.4 23.0 26.3
10.1 3.4 3.0 3.3 2.0 0.9 0.8 1.2
-16.1 -2.4 -16.2 -7.0 -13.3 -1.7 -14.5 0.00
4.1 3.7 2.7 4.2 2.5 3.2 3.8 5.2
09-Aug 24-Dec 09-Feb 26-Feb 24-Dec 24-Dec 24-Dec 23-Dec
24.1 11.8 8.3 4.4 6.4 2.6 1.7 2.1
Buy Neutral Buy Neutral Neutral Neutral Buy Neutral
SGP GPT DXS MGR ALZ CHC AAD THG CDI
7,846.8 5,198.7 4,282.5 4,168.6 603.8 509.0 340.4 336.6 214.1
12.4 8.2 6.7 6.6 1.0 0.8 0.5 n.a. n.a.
$3.32 $3.07 $0.89 $1.22 $2.57 $2.10 $1.05 $0.58 $0.49
7.4 6.1 6.2 6.8 8.8 9.9 12.3 3.5 8.6
10.0 7.8 8.9 8.8 9.5 12.6 11.3 9.9 9.9
10.3 13.2 11.4 11.5 10.6 8.2 9.2 10.2 10.3
$4.13 $3.39 $0.92 $1.44 $2.53 $2.96 $1.52 n.a. $0.54
-19.6 -9.5 -3.4 -15.2 1.6 -29.1 -31.1 -9.8
$3.50 $3.30 $0.94 $1.30 $2.90 $2.47 $1.55 $0.75 $0.58
12.9% 13.6% 12.4% 13.4% 21.6% 27.5% 59.9% 33.9% 27.0%
23.7 17.6 5.2 8.4 21.5 15.8 11.5 4.0
24.1 18.3 5.4 8.3 22.4 20.1 12.5 2.0 4.1
25.2 19.1 5.5 8.9 23.2 19.2 14.4 2.5 4.1
26.5 19.6 5.7 9.9 24.1 20.6 16.8 3.2 4.4
31.6 22.4 7.4 10.5 23.2 21.3 12.6 4.5 4.9
32.3 23.2 7.7 10.6 24.2 25.6 11.4 5.6 4.7
33.8 24.2 7.8 11.1 25.0 24.5 13.3 5.6 5.0
35.5 24.9 8.2 12.3 26.1 26.2 15.5 5.6 5.2
8.8 7.4 8.8 8.0 n.a. 11.8 n.a. n.a. 10.3
7.5 6.7 7.7 7.6 8.3 7.9 n.a. n.a. 8.2
22.0 21.0 28.4 26.3 30.7 8.1 31.5 38.2 27.1
3.4 3.3 0.9 1.2 2.9 2.5 1.6 0.8 0.6
-2.4 -7.0 -1.7 0.00 -11.4 -15.0 -34.4 -23.3 -14.0
3.7 4.2 3.2 5.2 3.7 7.8 12.3 n.a. 2.7
24-Dec 26-Feb 24-Dec 23-Dec 24-Dec 24-Dec 24-Dec 24-Dec 24-Dec
11.8 4.4 2.6 2.1 10.7 7.9 5.8 n.a. 2.0
Neutral Neutral Neutral Neutral Buy Buy Buy Buy Buy
WDC WRT CFX CQR BWP
17,990.6 6,995.7 3,987.9 881.7 703.5
28.3 11.0 6.3 1.4 1.1
$8.47 $2.49 $1.69 $3.26 $1.74
6.1 6.9 7.9 8.0 7.9
8.1 7.6 7.9 9.0 7.9
12.6 13.3 12.9 11.3 13.0
$9.63 $3.11 $2.02 $3.26 $2.06
-12.1 -19.9 -16.4 -0.1 -15.9
$9.50 $2.97 $1.95 $3.36 $1.91
18.3% 26.2% 23.3% 11.1% 18.0%
48.3 16.7 12.7 24.8 12.0
50.5 16.8 13.1 25.5 13.4
54.1 17.2 13.5 26.0 13.9
56.1 17.7 13.6 26.4 14.3
64.3 18.5 12.7 27.3 11.3
67.0 18.7 13.1 28.8 13.4
72.1 19.1 13.5 29.5 13.9
74.7 19.7 13.6 30.0 14.3
7.8 7.6 7.6 8.4 8.6
6.4 6.1 6.5 8.1 7.7
39.7 21.6 27.0 38.7 17.0
10.1 3.0 2.0 3.2 1.9
-16.1 -16.2 -13.3 1.2 -8.2
4.1 2.7 2.5 2.5 5.2
09-Aug 09-Feb 24-Dec 24-Dec 24-Dec
24.1 8.3 6.4 12.4 6.0
Buy Buy Neutral Neutral Buy
CQO CPA IOF
1,514.7 2,396.7 1,812.4
2.4 3.8 2.9
$3.55 $0.98 $0.64
5.8 5.9 6.3
7.7 7.5 7.9
13.2 13.6 12.8
$2.83 $0.91 $0.52
25.6 6.9 22.1
$3.65 $1.04 $0.69
8.6% 12.6% 14.1%
20.3 5.5 3.9
20.3 5.6 4.0
22.3 6.0 4.0
24.3 6.1 4.2
27.1 6.9 5.0
26.9 7.2 5.0
29.7 7.5 5.2
32.9 7.6 5.4
8.7 9.1 7.9
7.9 7.7 7.2
29.3 26.4 14.6
3.4 1.0 0.7
3.5 0.5 -1.5
3.5 3.3 2.5
24-Dec 24-Dec 23-Dec
10.1 2.8 1.0
Neutral Buy Buy
GMG
4,278.4
6.7
$0.65
5.9
9.8
10.5
$0.75
-13.2
$0.77
24.3%
3.4
3.7
3.9
4.0
5.8
6.2
6.4
6.6
9.3
7.9
23.0
0.8
-14.5
3.8
24-Dec
1.7
Buy
LEI LLC FKP PPC
3,721.9 3,759.7 451.4 254.4
n.a. n.a. n.a. n.a.
$22.72 $7.15 $0.64 $0.80
5.8 5.8 5.3 11.0
12.5 11.3 16.8 19.0
8.0 $25.62 8.9 $11.53 6.1 $1.06 5.5 $1.97
-11.3 $21.75 -38.0 8.8 -40.0 $0.86 -59.3 $1.15
1.5% 28.2% 40.7% 54.8%
60.0 35.0 3.0 8.5
129.9 41.4 3.3 8.5
136.3 45.6 3.5 9.7
146.8 49.0 3.9 11.3
194.6 84.9 10.3 14.6
283.0 80.1 10.4 14.6
194.7 85.7 11.3 16.1
236.9 92.2 12.4 18.8
n.a. n.a. n.a. n.a.
n.a. n.a. n.a. n.a.
38.0 6.0 28.9 33.5
n.a 9.3 0.9 2.1
n.a -22.7 -26.2 -61.9
22.8 7.6 7.6 7.5
11-Mar 04-Mar 24-Dec 28-Sep
30.0 17.5 1.5 4.3
Neutral Buy Buy Buy
S&P/ASX200 Prop.
S&P/ASX 63,511.5
6.6
8.5
12.1
-11.0
17.8%
8.0
6.9
28.3
-9.6
3.7
(1) Market Caps are quoted post freefloat adjustment. Trusts not included in index market caps are quoted unadjusted (2) Implied 12 month total return is equal to upside/downside to price target (from current price) plus cum-adjusted FY09 Yield. # Included in MSCI. For purposes of comparison, yields have been normalised to reflect a June year end for all trusts.
Industrials Earnings, Dividend & Valuation Sheet

ASX Code $ Company/Sector Y/E Price 1-Feb 12 Mth Price Target $ F/cast Excess Return % Reported Net Profit 2012e 2013e $m $m Rep. Net Profit Excl-Abnormals 2012e 2013e $m $m Reported EPS 2012e c Adjusted EPS (pre-exceptional) 2011a 2012e 2013e c c c Price Earnings Ratio (norm.) 2012e 2013e x x PER Relative
(Industrials ex fin)
Source: UBS
Free Cashflow Per Share 2012e 2013e c c EV/EBITDA ROCE 2012e Dividend Dividend 2012e c Yield 2012e % Frank 2012e % Price to Book 2012e x Consensus EPS 2012e 2013e c c Difference between UBS & Consensus 2012e 2013e % % Rating
2011a c
2013e c
2012e %
2013e %
2012e x
2013e x
Banks
ANZ BEN BOQ CBA NAB WBC ANZ Banking Group Bendigo & Adelaide Bank of Queensland Commonwealth Bank National Aust. Bank Westpac Banking Corp Sep-12 Jun-12 Aug-12 Jun-12 Sep-12 Sep-12 21.27 8.06 7.44 50.44 23.66 20.85 21.00 9.00 8.00 50.00 27.50 23.00 (0.8) 10.3 8.0 (0.6) 18.0 11.7 6,037 338 214 6,992 5,912 6,463 6,288 368 250 7,198 6,151 6,792 6,037 338 214 6,992 5,912 6,463 6,288 368 250 7,198 6,151 6,792 219.8 92.3 77.5 438.7 249.9 209.4 229.2 88.2 90.3 443.3 265.0 212.0 233.8 91.8 100.0 447.7 269.4 220.0 211.1 86.1 71.2 420.8 247.8 202.1 218.2 222.6 82.7 86.2 84.5 93.1 425.3 429.7 262.4 266.7 203.6 211.2 Arithmetic Average Weighted Average 9.7 9.7 8.8 11.9 9.0 10.2 9.9 10.3 9.6 9.3 8.0 11.7 8.9 9.9 9.6 10.0 75 75 68 91 70 79 85 83 71 104 79 87 nm nm nm nm nm nm nm nm nm nm nm nm nm nm nm nm nm nm nm nm nm nm nm nm nm nm nm nm nm nm 144.0 60.0 57.0 327.0 185.0 167.0 6.8 7.4 7.7 6.5 7.8 8.0 7.4 7.2 100 100 100 100 100 100 1.4 0.8 0.7 2.1 1.3 1.4 1.3 1.5 220.2 85.3 96.3 438.7 263.1 210.8 232.9 90.1 107.7 462.2 278.7 218.5 (0.9) (3.2) (14.0) (3.2) (0.3) (3.6) (4.6) (4.5) (15.6) (7.6) (4.5) (3.5) Neutral Neutral Neutral Neutral Buy Buy
Capital Goods
LEI UGL BLY Leighton Holdings UGL Ltd Boart Longyear Jun-12 Jun-12 Dec-11 22.72 13.14 3.44 21.75 15.35 4.40 (8.2) 14.3 20.1 669 173 198 655 192 215 599 173 198 655 192 215 194.6 95.8 32.1 197.9 104.5 43.3 193.0 115.7 47.2 (132.5) 95.4 32.0 177.2 193.0 104.3 115.5 43.1 47.0 Arithmetic Average Weighted Average 12.8 12.6 8.0 11.1 11.8 11.8 11.4 7.3 10.2 10.8 99 97 61 104 101 65 133.7 114.8 11.9 143.8 145.5 35.3 4.6 7.6 4.6 4.5 6.9 4.1 33.3 17.4 20.5 115.2 73.0 13.2 5.1 5.6 3.8 4.8 8.8 0 100 0 2.5 1.6 1.2 1.8 1.2 184.7 104.4 40.3 210.0 117.5 46.6 (4.2) (0.1) 6.6 (8.8) (1.8) 0.9 Neutral Buy Buy
Commercial Services & Supplies

BXB DOW SEK Brambles Downer EDI Seek Ltd Jun-12 Jun-12 Jun-12 7.29 3.65 5.24 8.00 3.50 7.65 7.2 (11.7) 42.3 598 179 116 675 193 145 627 179 116 703 193 145 33.2 (7.6) 29.0 40.8 41.7 34.6 47.0 45.0 43.1 37.7 21.3 29.0 44.1 51.4 41.7 45.0 34.6 43.1 Arithmetic Average Weighted Average 16.5 8.7 15.2 13.5 14.9 14.2 8.1 12.1 11.5 12.8 127 67 117 125 72 108 22.1 (96.4) 31.6 25.0 13.7 45.4 8.7 3.6 10.2 8.1 3.3 8.8 19.2 15.5 26.0 27.5 0.0 17.3 3.8 0.0 3.3 2.4 3.0 25 0 100 3.9 0.9 4.8 3.2 3.3 41.5 41.0 36.7 48.4 46.2 44.3 5.8 1.7 (6.1) 5.9 (2.7) (2.7) Buy Neutral Buy (CBE)
Consumer Durables, Apparel & Retail

BBG DJS HVN JBH MYR Billabong Int'l Ltd David Jones Harvey Norman JB Hi-Fi Myer Jun-12 Jul-12 Jun-12 Jun-12 Jul-12 1.92 2.66 2.04 12.60 2.13 2.55 2.70 2.65 15.75 2.65 32.9 8.9 28.7 25.8 25.9 61 144 217 122 151 83 161 284 140 160 64 144 214 122 151 83 161 277 140 160 47.4 33.0 23.7 148.1 27.4 24.4 27.4 20.4 123.5 25.8 33.1 30.2 26.8 141.6 27.1 51.7 32.4 22.3 124.5 27.6 25.4 32.8 27.0 29.7 20.2 26.1 122.7 140.6 25.8 27.1 Arithmetic Average Weighted Average 7.5 9.9 10.1 10.3 8.2 9.2 9.4 5.8 8.9 7.8 9.0 7.9 7.9 8.0 58 76 78 79 64 52 79 69 79 70 13.4 25.0 12.8 112.7 38.3 27.1 24.5 19.7 114.9 27.1 6.5 5.6 5.9 6.6 4.8 5.8 5.0 4.6 5.8 4.6 6.8 23.3 12.8 51.2 19.7 0.0 23.0 11.1 76.0 23.0 0.0 8.6 5.4 6.0 10.8 6.2 8.3 0 100 100 100 100 0.4 1.7 0.9 6.3 1.4 2.2 1.0 24.3 26.3 20.8 120.0 23.8 28.4 27.5 23.7 130.2 24.9 4.2 2.4 (3.1) 2.2 7.9 13.5 7.5 9.2 7.4 8.1 Buy Sell Buy Neutral Buy
Diversified Financials
ASX CGF CPU MQG PPT SUN ASX Limited Challenger Group Computershare Macquarie Group Perpetual Limited Suncorp Group Jun-12 Jun-12 Jun-12 Mar-12 Jun-12 Jun-12 29.68 4.49 7.58 25.02 20.25 8.38 34.00 5.25 8.50 27.00 20.60 9.00 14.0 16.1 6.7 3.9 2.7 7.9 366 271 273 840 57 899 390 292 317 1,032 59 1,135 366 271 287 840 57 994 390 292 331 1,032 59 1,221 202.5 60.5 48.2 286.9 179.4 35.6 208.8 53.0 49.2 258.9 145.5 67.9 222.7 54.9 57.1 319.9 155.4 84.9 205.0 48.1 56.4 275.8 165.7 49.8 208.7 222.2 52.0 54.3 51.7 59.6 241.3 297.4 133.7 142.4 74.7 91.0 Arithmetic Average Weighted Average 14.2 8.6 14.7 10.4 15.1 11.2 12.4 11.5 13.4 8.3 12.7 8.4 14.2 9.2 11.0 9.8 110 67 113 80 117 87 118 73 113 74 126 82 203.4 53.0 60.2 nm 154.6 nm 223.3 54.9 69.6 nm 153.6 nm 9.3 7.8 9.8 nm 5.4 nm 8.4 7.1 8.3 nm 5.1 nm 18.8 15.9 16.6 nm 34.3 nm 187.9 18.0 31.0 151.0 133.0 48.0 6.3 4.0 4.1 6.0 6.6 5.7 5.5 5.7 100 100 0 0 100 100 1.7 1.1 3.4 0.8 2.4 1.3 1.8 1.2 210.4 51.1 50.6 245.7 136.4 74.5 226.8 56.7 61.4 310.2 148.0 91.4 (0.8) 1.7 2.1 (1.8) (2.0) 0.3 (2.1) (4.4) (3.1) (4.3) (3.9) (0.4) Buy Buy Neutral Neutral Sell Buy
Food and Staples Retailing

MTS WES WOW Metcash Ltd Wesfarmers Woolworths Ltd Apr-12 Jun-12 Jun-12 4.03 29.71 24.70 3.90 32.10 28.00 (2.5) 6.3 12.0 231 2,183 2,007 279 2,473 2,520 257 2,225 2,220 287 2,473 2,520 31.4 166.7 174.6 30.0 189.3 164.1 36.2 214.4 203.3 33.3 166.8 173.6 33.3 37.0 191.8 213.2 180.3 202.0 Arithmetic Average Weighted Average 12.1 15.5 13.7 13.8 14.5 10.9 13.9 12.2 12.4 13.0 93 119 106 96 123 108 39.5 109.9 105.1 32.7 135.1 154.6 8.1 8.2 7.9 7.3 7.6 7.0 20.3 12.5 29.2 24.5 178.0 127.0 6.1 6.0 5.1 5.7 5.6 100 100 100 2.2 1.3 3.6 2.4 1.9 34.1 202.6 179.3 36.7 225.0 194.9 (2.5) (5.6) 0.6 0.8 (5.5) 3.5 Neutral Neutral Buy
Food, Beverages & Tobacco

CCL GFF TWE Coca-Cola Amatil Goodman Fielder Treasury Wine Dec-11 Jun-12 Jun-12 11.50 0.52 3.47 11.90 0.57 3.75 1.3 10.1 4.3 593 117 117 658 134 155 593 127 128 658 159 155 78.2 (11.3) 16.7 77.7 6.5 18.2 85.3 6.7 24.1 70.2 9.0 16.7 77.7 85.3 7.1 8.0 20.0 24.1 Arithmetic Average Weighted Average 14.8 7.3 17.4 13.2 14.0 13.5 6.5 14.4 11.5 12.5 114 57 134 119 58 127 37.9 6.7 12.6 57.5 6.5 12.7 8.5 5.5 7.6 7.6 4.7 6.5 26.4 11.8 6.8 55.9 4.9 14.0 4.9 9.4 4.0 6.1 6.9 100 20 5 3.8 0.7 0.8 1.7 1.3 76.6 6.4 20.5 83.7 6.8 24.6 1.4 9.8 (2.7) 1.8 15.0 (2.1) Neutral Neutral Neutral
Health Care
ANN COH CSL PRY SHL Ansell Limited Cochlear CSL Primary Health Care Sonic Healthcare Jun-12 Jun-12 Jun-12 Jun-12 Jun-12 14.95 58.90 31.35 2.95 11.39 11.64 43.80 36.70 3.90 11.62 (27.7) (31.1) 12.5 29.0 (0.2) 109 50 984 118 307 117 167 1,102 143 333 109 157 1,015 140 333 117 172 1,133 164 359 92.9 314.2 177.7 15.8 75.8 84.9 88.0 192.0 23.8 79.0 92.9 295.1 222.7 28.8 85.8 82.5 320.8 179.3 23.3 81.0 84.1 92.9 277.4 303.2 198.1 228.9 28.1 33.0 85.1 91.7 Arithmetic Average Weighted Average 17.8 21.2 15.8 10.5 13.4 15.7 15.6 16.1 19.4 13.7 8.9 12.4 14.1 13.7 137 164 122 81 103 142 172 121 79 110 42.2 283.7 123.2 35.0 66.9 71.0 297.8 168.4 41.1 93.0 11.8 14.8 12.0 7.1 9.2 11.1 13.5 10.7 6.5 8.5 20.1 47.8 34.1 7.5 12.1 37.4 224.1 88.4 17.5 54.1 2.5 3.8 2.8 5.9 4.8 4.0 3.4 0 80 6 100 28 2.9 7.8 4.7 0.6 1.7 3.5 2.8 98.8 246.8 189.3 25.0 82.1 109.5 292.3 217.0 28.5 89.8 (17.5) 11.0 4.4 11.0 3.5 (17.9) 3.6 5.2 13.8 2.1 Sell Sell Buy Buy Neutral
Industrials Earnings, Dividend & Valuation Sheet

ASX Code $ Company/Sector Y/E Price 1-Feb 12 Mth Price Target $ F/cast Excess Return % Reported Net Profit 2012e 2013e $m $m Rep. Net Profit Excl-Abnormals 2012e 2013e $m $m Reported EPS 2012e c Adjusted EPS (pre-exceptional) 2011a 2012e 2013e c c c Price Earnings Ratio (norm.) 2012e 2013e x x PER Relative
Source: UBS
Free Cashflow Per Share 2012e 2013e c c EV/EBITDA ROCE 2012e Dividend Dividend 2012e c Yield 2012e % Frank 2012e % Price to Book 2012e x Consensus EPS 2012e 2013e c c Difference between UBS & Consensus 2012e 2013e % % Rating
2011a c
2013e c
2012e %
2013e %
2012e x
2013e x
Hotels, Restaurants & Leisure

ALL CWN EGP TAH TTS Aristocrat Crown Echo Entertainment Tabcorp Tatts Group Dec-11 Jun-12 Jun-12 Jun-12 Jun-12 2.45 8.14 3.63 2.95 2.49 3.00 10.40 5.70 3.50 2.50 18.1 26.5 54.8 22.5 (0.1) 86 403 119 348 319 109 473 207 176 209 86 403 139 348 319 109 473 207 176 209 10.0 44.6 35.6 45.5 21.2 15.7 54.4 17.3 49.3 24.0 19.8 64.9 30.2 23.8 15.5 10.0 44.3 32.8 45.4 21.2 15.7 19.8 54.0 64.5 20.2 30.2 49.0 23.7 24.0 15.5 Arithmetic Average Weighted Average 15.6 15.1 17.9 6.0 10.4 13.0 11.9 12.4 12.6 12.0 12.4 16.1 13.1 13.1 120 116 138 46 80 109 112 107 110 142 22.6 25.1 5.7 38.1 31.0 22.7 72.3 18.2 15.5 11.0 8.6 10.0 8.4 4.1 6.7 7.0 9.0 6.7 6.0 8.5 34.2 13.2 8.6 25.4 14.3 10.0 37.0 10.0 25.0 22.0 4.1 4.5 2.8 8.5 8.8 5.7 7.4 100 60 100 100 100 6.6 1.7 1.0 1.4 1.3 2.4 1.2 16.8 54.4 21.3 47.4 24.1 21.2 63.8 25.3 23.0 15.7 (6.9) (0.7) (5.2) 3.3 (0.3) (6.9) 1.0 16.1 3.0 (1.4) Buy Buy Buy Buy Buy
Insurance
AMP IAG QBE AMP Insurance Aust Group QBE Dec-11 Jun-12 Dec-11 4.23 2.89 11.34 5.00 3.10 12.00 18.2 8.2 4.6 944 412 1,317 1,086 738 1,500 1,035 447 1,467 1,176 780 1,650 24.2 12.1 62.4 27.0 19.9 110.6 36.2 35.7 123.4 34.2 20.7 74.0 35.7 40.3 21.6 37.8 123.1 135.7 Arithmetic Average Weighted Average 11.9 13.4 9.2 11.5 10.8 10.5 7.7 8.4 8.8 8.9 91 103 71 93 68 74 nm nm nm nm nm nm nm nm nm nm nm nm 13.5 9.3 nm 31.0 15.0 92.0 7.3 5.2 8.1 6.9 7.2 85 100 0 3.8 2.4 2.6 2.9 3.0 34.1 22.2 124.5 39.4 35.3 132.8 4.4 (2.7) (1.1) 2.3 6.5 2.1 Buy Neutral Neutral
Media
FXJ NWS WAN Fairfax Media Ltd News Corporation Seven West Media + Jun-12 Jun-12 Jun-12 0.82 17.72 3.37 0.95 17.88 4.00 30.7 (3.3) 22.3 217 3,445 264 241 3,912 271 231 3,445 264 241 3,912 271 (17.0) 113.7 38.6 9.2 137.1 41.1 10.2 164.1 40.0 10.9 119.7 46.4 9.8 10.2 137.1 164.1 38.7 37.6 Arithmetic Average Weighted Average 8.3 12.9 8.7 10.0 12.9 8.0 10.8 9.0 9.2 11.1 64 100 67 71 96 79 11.3 1.4 38.9 10.2 1.5 41.4 5.9 6.3 7.0 5.4 5.7 6.8 7.4 17.9 11.5 4.9 19.0 41.1 6.0 1.1 12.2 6.4 1.7 100 100 0.4 1.7 0.8 1.0 1.5 10.0 138.2 40.2 10.9 168.3 39.7 (1.8) (0.8) (4.0) (6.6) (2.5) (5.6) Buy (CBE) Neutral Buy (CBE)
Real Estate Managers & Developers

LLC Lend Lease Group Jun-12 7.15 8.75 16.3 459 489 459 489 84.9 80.0 84.9 84.9 80.0 84.9 Arithmetic Average Weighted Average 8.9 8.9 8.9 8.4 8.4 8.4 70 72 nm nm 6.4 6.1 12.5 41.4 5.8 5.8 5.8 50 0.9 0.9 0.9 77.3 85.8 3.4 (1.0) Buy
Telecommunication Services
TLS SGT TEL Telstra Singapore Telecom Telecom NZ * Jun-12 Mar-12 Jun-12 3.30 2.33 2.16 4.00 2.62 1.85 23.6 12.0 (9.0) 3,582 2,961 275 3,911 3,268 285 3,582 2,931 275 3,911 3,268 285 26.0 19.1 3.6 28.8 18.6 14.3 31.4 20.5 14.8 26.0 19.0 12.4 28.8 31.4 18.4 20.5 14.3 14.8 Arithmetic Average Weighted Average 11.5 12.7 15.1 13.1 11.9 10.5 11.4 14.6 12.1 11.0 88 98 116 93 101 129 36.1 0.2 23.9 39.0 0.2 22.9 5.3 7.1 4.3 5.0 6.5 4.3 23.4 18.9 16.8 28.0 12.1 16.0 8.5 5.2 7.4 7.0 8.3 100 0 100 3.4 1.4 2.3 2.4 2.4 28.5 0.0 17.2 29.6 0.0 17.0 1.0 0.0 (20.3) 5.8 0.0 (14.8) Buy Buy Neutral
Transportation
AIO MAP QAN TCL TOL Asciano Sydney Airport Qantas Airways Transurban Toll Holdings Jun-12 Dec-11 Jun-12 Jun-12 Jun-12 4.62 2.69 1.56 5.57 5.04 6.00 2.85 2.00 5.90 5.80 23.3 6.0 21.5 5.0 14.9 276 (342) 99 35 303 356 (318) 447 85 345 321 (342) 323 35 333 388 (318) 503 85 374 14.8 (20.5) 11.0 8.3 41.8 28.3 (18.4) 4.4 2.4 42.5 36.6 (17.1) 19.7 5.8 47.7 26.2 (20.5) 18.0 8.3 43.4 32.9 39.8 (18.4) (17.1) 14.3 22.2 2.4 5.8 46.5 51.7 Arithmetic Average Weighted Average 14.1 nm 10.9 nm 10.8 11.9 11.9 11.6 nm 7.0 nm 9.7 9.5 9.2 108 nm 84 nm 84 103 nm 62 nm 86 (30.4) 31.6 (23.4) 10.8 18.7 (1.1) 35.6 (31.3) 35.4 30.5 7.6 nm 3.1 nm 6.4 6.9 nm 3.2 nm 5.8 11.6 2.4 6.4 3.5 12.4 9.0 21.0 0.0 30.0 25.0 1.9 7.8 0.0 5.4 5.0 3.8 2.5 99 0 0 0 100 1.3 1.0 0.6 2.3 1.2 1.3 0.8 29.5 0.0 13.2 0.0 42.1 36.1 0.0 20.1 0.0 46.8 10.2 0.0 7.5 0.0 9.5 9.4 0.0 9.3 0.0 9.5 Buy Neutral Buy Buy Buy
Utilities
AGK APA DUE SKI AGL Energy APA Group DUET Spark Infrastructure Jun-12 Jun-12 Jun-12 Dec-11 14.46 4.82 1.81 1.33 16.79 4.65 1.82 1.40 10.9 (4.3) 0.9 3.5 478 137 96 176 495 157 104 147 478 137 96 176 495 157 104 147 94.4 19.5 13.9 8.2 103.5 21.3 9.6 13.3 107.3 23.9 9.4 11.0 94.4 19.5 13.9 8.2 103.5 107.3 21.3 23.9 9.6 9.4 13.3 11.0 Arithmetic Average Weighted Average 14.0 22.6 18.9 10.0 16.4 15.1 13.5 20.2 19.3 12.0 16.2 15.0 108 174 145 77 119 178 170 107 (72.5) (6.9) (2.9) 12.9 (40.7) (6.0) nm 10.6 9.0 11.1 9.3 0.4 9.4 10.8 8.8 nm 9.9 9.5 8.5 11.2 63.0 35.1 16.0 9.7 4.4 7.3 8.8 7.3 6.9 6.1 100 0 0 0 1.0 1.8 1.6 1.2 1.4 1.3 104.4 20.0 9.7 12.6 112.5 21.5 10.5 13.9 (0.8) 6.2 (1.0) 5.2 (4.9) 10.1 (11.7) (25.8) Buy Neutral Buy Neutral
EPS Growth (normalised) 2011a % 2012e % 2013e % 2014e % 2011a x
Price Earnings Ratio (norm.) 2012e x 2013e x 2014e x 2011a x
EV/EBITDA
Dividend Yield Notes: 2013e % 2014e % Weighted Averages calculated from aggregate figures, e.g. P/E = (S market cap)/(S net profit). Arithmetic Averages calculated as the sample mean, excluding outliers. Relative P/E's for non-bank are calculated relative to the industrials Arithmetic Average excluding Banks and Insurance
2012e x
2013e x
2014e x
2011a %
2012e %
Industrials (Top 100)

Arithmetic Average Weighted Average 7.9 na 7.7 8.0 9.0 7.8 13.8 6.6 13.4 12.2 12.8 11.3 11.1 10.5 10.0 9.8 8.6 7.4 7.3 6.8 6.7 6.4 6.1 5.9 5.4 5.7 5.4 6.1 6.2 6.5 6.9 6.9
Individual Sector data is weighted by market capitalisation Ranges: EPS Growth -25% to +50% P/E 0 to 50 Div Yld 0% to 20%
All Industrials excluding Financials

U.R. denotes Under Review. Stocks may be flagged as UR by the analyst, indicating that the stock's price target and/or rating are subject to possible change in the near term, usually in response to an event that may affect the investment case or valuation. * All figures in NZ$.
+ All figures in US$.
CBE: denotes Core Band Exception. The standard UBS band for Neutral stocks is -6% to +6%.
All Ordinaries
Any stocks with a modified band are denoted by CBE. Source of Consensus EPS is Thomson Financial
Materials Earnings, Dividend & Valuation Sheet

ASX Code $ Company/Sector Y/E Price 1-Feb 12 Mth Price Target $ F/cast Excess Return % Reported Net Profit 2012e $m 2013e $m Rep. Net Profit Excl-Abnormals 2011a $m 2012e $m 2013e $m Reported EPS 2012e c 2013e c 2011a c Adjusted EPS (pre-exceptional) 2012e c 2013e c Price Earnings Ratio (norm.) 2012e x 2013e x PER Relative
(Materials)
Source: UBS
Free Cashflow Per Share 2012e c 2013e c 2012e x 2013e x 2012e % 2012e c EV/EBITDA ROCE Dividend Dividend Yield 2012e % 2012e % Frank Consensus EPS 2012e c 2013e c Difference between UBS & Consensus 2012e % 2013e % Rating
2012e %
2013e %
Chemicals
DLX IPL NUF ORI Dulux Group Incitec Pivot Nufarm Orica Sep-12 Sep-12 Jul-12 Sep-12 2.88 3.15 4.37 24.30 3.05 4.00 5.20 29.00 6.3 21.3 8.4 15.6 82 536 127 701 90 578 153 821 78 530 87 643 82 536 127 724 90 578 153 844 22.2 32.9 48.4 192.2 24.4 35.5 58.3 224.0 21.4 32.6 33.1 179.5 22.1 24.4 32.9 35.5 48.4 58.3 198.1 229.7 Arithmetic Average Weighted Average 13.0 9.6 9.0 12.3 11.0 11.0 11.8 8.9 7.5 10.6 9.7 9.8 99 73 68 93 102 76 65 91 22.3 11.9 34.1 87.6 22.2 34.3 40.7 110.2 7.6 6.8 5.2 7.7 6.8 7.1 7.1 5.9 4.5 6.9 6.1 6.3 36.0 15.5 11.7 22.5 15.5 11.6 10.8 99.0 5.4 3.7 2.5 4.1 3.9 3.9 0 0 0 40 22.1 31.8 40.8 192.9 23.5 33.7 47.7 220.7 0.1 3.4 15.7 2.6 3.5 5.0 18.1 3.9 Buy Buy Buy Buy
Construction Materials
ABC BLD CSR JHX Adelaide Brighton Boral CSR Ltd James Hardie Ind. Dec-11 Jun-12 Mar-12 Mar-12 2.90 3.98 2.01 6.95 3.20 5.03 2.60 7.04 8.7 21.0 25.0 (8.1) 158 166 62 176 171 221 86 204 148 175 90 86 158 166 84 114 171 221 86 117 24.8 22.3 12.3 41.8 27.0 28.5 17.1 51.9 23.4 24.2 17.8 19.7 24.8 27.0 22.3 28.5 16.6 17.1 27.0 29.7 Arithmetic Average Weighted Average 11.7 17.8 12.1 25.8 15.6 15.5 10.8 13.9 11.8 23.4 14.0 13.8 89 135 92 199 93 120 101 207 18.0 10.3 17.8 23.9 28.3 2.8 18.3 34.5 8.2 7.4 3.7 13.7 8.2 7.3 7.8 7.0 3.7 11.9 7.6 6.8 18.6 7.1 14.6 (46.4) 20.0 13.0 14.0 7.7 6.9 3.3 7.0 1.1 4.5 3.8 100 100 100 0 25.3 23.8 16.4 30.0 28.2 32.2 18.9 37.2 (2.0) (6.5) 1.3 (11.1) (4.6) (12.8) (10.5) (25.4) Buy Buy Buy Neutral
Containers & Packaging

AMC Amcor Jun-12 7.02 7.80 8.1 620 727 570 637 727 51.1 59.8 45.9 51.7 59.0 Arithmetic Average Weighted Average 13.6 13.6 13.6 11.9 11.9 11.9 103 102 63.6 64.2 7.3 7.3 7.3 6.6 6.6 6.6 15.9 39.0 5.6 5.6 5.6 0 52.7 60.0 (1.9) (1.7) Buy
Materials
Industrials (Top 100)

Ranges: EPS Growth -25% to +50% P/E 0 to 50 Div Yld 0% to 20% U.R. dentotes Under Review. Stocks may be flagged as UR by the analyst, indicating that the stock's price target and/or rating are subject to possible change in the near term, usually in response to an event that may affect the investment case or valuation. CBE: denotes Core Band Exception. The standard UBS band for Neutral stocks is -6% to +6%. Any stocks with a modified band are denoted by CBE. Source of Consensus EPS is Thomson Financial

All Ordinaries
Emerging Industrials Earnings, Dividend & Valuation Sheet

ASX Code $m $ Company/Sector Y/E Mkt Cap Price 1-Feb 12 Month Share Price Target upside/(downside) $ % F/cast Excess Return Reported Net Profit 2012e $m 2013e $m Rep. Net Profit
Excl-Abnormals
Source: UBS
Reported EPS 2012e c 2013e c 2011a c Adjusted EPS (pre-exceptional) 2012e c 2013e c Price Earnings Ratio (norm.) 2012e x 2013e x PER Relative
EV/EBITDA 2012e x 2013e x
EV/Revenue 2012e x 2013e x
ROCE 2012e
Dividend DPS 2012e c Yield 2012e %
Frank 2012e %
Consensus EPS 2012e c 2013e c
Difference between UBS & Consensus 2012e % 2013e %
Rating
Analyst
2012e $m
2013e $m
2012e %
2013e %
Capital Goods
AAX ASB BOL BKN CDD EHL GWT LDW HST MAH MND Ausenco Austal Boom Logistics Ltd Bradken Limited Cardno Limited Emeco Holdings Ltd GWA Group Ludowici Limited Hastie Group Macmahon Holdings Monadelphous Group Dec-11 Jun-12 Jun-12 Jun-12 Jun-12 Jun-12 Jun-12 Dec-11 Jun-12 Jun-12 Jun-12 367.7 385.5 130.2 1,272.8 660.7 643.9 707.6 199.2 76.9 473.2 1,945.1 2.99 2.05 0.28 7.74 5.99 1.02 2.35 6.76 0.56 0.65 22.21 2.50 3.00 0.49 10.15 6.90 1.30 2.60 7.20 0.70 0.90 22.00 (16.4) 46.3 75.0 31.1 15.2 27.5 10.6 6.5 25.0 39.5 (0.9) (17.5) 43.5 78.9 28.9 15.2 27.7 11.2 2.7 15.3 33.6 (1.0) 26 43 17 119 71 70 34 15 (29) 56 116 41 63 18 142 75 85 61 18 24 64 126 30 43 17 119 71 71 50 17 (29) 56 116 45 63 18 142 75 85 61 20 24 64 126 20.9 23.0 3.7 71.3 62.7 11.1 11.2 50.5 (21.0) 7.6 132.2 33.4 33.3 4.0 85.0 66.6 13.4 20.1 60.0 17.5 8.8 144.2 17.8 11.6 0.4 66.5 55.4 9.2 21.1 42.9 73.7 (1.1) 106.9 24.2 36.6 22.8 33.1 3.7 4.0 70.6 84.2 62.2 66.0 11.2 13.4 16.5 20.1 57.2 66.7 (21.0) 17.5 7.4 8.6 129.8 141.6 Arithmetic Average Weighted Average 12.4 9.0 7.6 11.0 9.6 9.1 14.2 11.8 nm 8.7 17.1 11.0 11.0 8.2 6.2 7.1 9.2 9.1 7.6 11.7 10.1 3.2 7.5 15.7 8.7 9.2 95 69 58 85 74 70 110 91 nm 67 132 72 55 63 81 80 67 103 90 28 66 139 7.5 6.6 3.6 6.5 6.1 3.5 8.6 7.3 nm 3.4 9.4 6.3 5.9 5.5 5.0 3.4 5.8 5.7 3.3 7.7 6.6 4.1 2.7 8.7 5.3 5.0 0.6 0.7 0.7 1.1 0.8 1.6 1.4 1.0 0.1 0.3 1.0 0.8 0.8 0.5 0.6 0.7 1.0 0.7 1.5 1.4 0.9 0.1 0.2 0.9 0.8 0.7 15.7 14.3 8.4 20.5 25.1 14.3 13.8 18.5 (2.5) 23.5 270.9 12.0 6.2 0.6 42.4 37.0 6.1 18.0 25.2 0.0 2.3 112.3 23.8 4.0 3.0 2.0 5.5 6.2 6.0 7.7 3.7 0.0 3.5 5.1 4.2 5.2 100 100 100 100 70 100 100 100 0 100 100 27.2 19.3 3.8 71.4 61.8 11.1 18.0 54.9 23.3 7.4 128.2 34.0 26.0 4.8 83.9 67.0 12.9 19.9 65.4 22.6 8.4 147.1 (12.5) 15.5 (2.9) (1.1) 0.6 0.6 (8.9) 4.0 210.9 0.5 1.2 7.2 21.4 (21.2) 0.4 (1.6) 4.0 1.0 2.0 (28.9) 2.4 (3.9) Sell Buy Buy (CBE) Buy Buy Buy Buy Neutral Neutral Buy Neutral MB MB MB MB LP MB LP MB MB MB MB
Commercial Services & Supplies

CAB COF CPB FWD PRG SAI SLM SPT TOX Cabcharge Australia Coffey Intl Ltd Campbell Brothers Fleetwood Programmed Maint SAI Global Salmat Ltd Spotless Group Tox Free Solutions Jun-12 Jun-12 Mar-12 Jun-12 Mar-12 Jun-12 Jun-12 Jun-12 Jun-12 540.8 126.8 3,253.8 700.0 239.9 1,004.8 393.0 630.6 233.6 4.49 0.53 51.68 12.10 2.03 4.97 2.46 2.40 2.25 6.50 0.58 52.00 13.20 2.50 5.70 3.75 2.50 2.80 44.8 9.4 0.6 9.1 23.2 14.7 52.4 4.2 24.4 46.8 8.2 (4.7) 8.9 23.0 9.7 61.1 0.4 18.3 68 14 211 55 30 51 36 43 18 72 19 238 59 33 63 43 54 24 68 14 211 55 30 57 49 43 18 72 19 238 59 33 68 56 54 24 56.2 6.1 310.7 95.6 25.0 25.2 22.2 16.5 17.8 59.9 8.0 351.2 101.6 27.8 31.1 27.1 20.6 21.7 50.7 1.6 194.9 88.6 18.7 27.5 34.1 16.8 14.6 56.2 59.9 6.1 7.9 310.7 350.9 94.1 100.0 24.5 27.3 28.4 33.6 30.1 34.9 16.5 20.6 17.8 21.7 Arithmetic Average Weighted Average 8.0 8.7 16.6 12.9 8.3 17.5 8.2 14.5 12.7 12.2 13.6 7.5 6.7 14.7 12.1 7.4 14.8 7.0 11.6 10.4 10.4 11.8 62 67 128 99 64 135 63 112 98 66 59 130 107 66 131 62 103 92 4.5 5.0 9.7 7.6 5.2 10.6 6.1 5.2 5.9 6.4 6.6 4.1 4.7 8.6 7.3 5.0 9.3 5.6 4.6 4.3 5.7 5.9 2.1 0.5 2.5 1.4 0.3 2.6 0.8 0.3 1.4 1.3 1.0 1.9 0.5 2.2 1.4 0.3 2.3 0.8 0.3 1.2 1.2 0.9 22.0 14.2 28.1 38.0 11.8 17.5 15.7 12.3 20.2 36.5 0.0 202.0 76.5 12.6 14.9 20.0 8.2 3.5 37.4 8.1 0.0 3.9 6.3 6.2 3.0 8.1 3.4 1.6 4.1 4.0 100 0 0 100 100 0 0 60 100 54.5 8.1 311.0 93.1 25.0 29.9 28.8 17.4 17.4 58.1 10.0 360.5 98.5 30.0 35.8 33.2 19.9 20.3 3.1 (32.5) (0.1) 1.0 (2.0) (5.3) 4.3 (5.4) 2.0 3.0 (25.8) (2.7) 1.5 (10.0) (6.7) 4.9 3.5 6.4 Buy Buy (CBE) Neutral Buy Buy Buy Buy Neutral Buy MB LP RD MB MB RD MB MB MB
Consumer Durables & Apparel

GUD KMD GUD Holdings Kathmandu Jun-12 Jul-12 525.1 254.0 7.49 1.27 8.90 1.40 18.8 10.2 22.1 11.8 45 34 57 41 47 34 57 41 64.6 17.1 80.7 20.4 76.0 19.4 67.7 80.7 17.0 20.3 Arithmetic Average Weighted Average 11.1 7.5 9.3 9.6 9.3 6.3 7.8 8.0 85 58 82 55 6.0 5.8 5.9 5.9 5.4 4.9 5.2 5.2 0.9 1.1 1.0 1.0 0.8 1.0 0.9 0.9 21.5 18.2 66.0 9.4 37.7 8.8 7.4 8.1 8.3 100 0 68.2 19.2 75.9 21.9 (0.8) (12.8) 5.9 (7.9) Buy Neutral (CBE) LP RD

Excl-Abnormals
Source: UBS
ROCE 2012e
Frank 2012e %
Rating
Analyst
2012e $m
2013e $m
2012e %
2013e %
Consumer Services
CKF DMP FLT JET NVT NVT WEB Collins Foods Domino's Flight Centre Jetset Travelworld Navitas Limited Retail Food Group Webjet Limited Apr-12 Jun-12 Jun-12 Jun-12 Jun-12 Jun-12 Jun-12 139.0 503.9 1,897.9 298.6 1,119.0 270.6 188.4 1.39 7.41 19.04 0.68 2.98 2.50 2.51 2.00 7.50 21.00 0.80 5.10 3.00 2.55 43.9 1.2 10.3 17.6 71.1 20.0 1.6 46.4 (3.7) 11.1 20.2 80.3 21.6 (1.8) 9 26 191 37 73 30 13 21 29 208 41 90 33 14 18 26 191 37 74 30 13 21 29 208 41 91 33 14 9.5 36.9 191.3 8.4 19.5 27.9 17.1 22.7 41.4 207.5 9.3 23.9 30.3 18.6 24.5 30.9 169.2 8.1 21.5 25.2 14.6 19.4 22.7 36.4 40.6 191.3 207.5 8.4 9.3 19.8 24.2 27.9 30.3 17.0 18.4 Arithmetic Average Weighted Average 7.2 20.3 10.0 8.1 15.1 9.0 14.7 12.0 11.4 6.1 18.2 9.2 7.3 12.3 8.2 13.6 10.7 10.2 55 157 77 62 116 69 114 54 161 81 65 109 73 120 4.9 10.3 5.2 5.1 8.8 7.1 9.6 7.3 6.5 4.4 9.2 4.5 4.5 7.3 6.7 8.8 6.5 5.7 0.6 1.9 0.9 0.7 1.5 3.4 3.1 1.7 1.1 0.6 1.8 0.8 0.7 1.4 3.4 2.8 1.6 1.0 12.7 36.9 31.1 11.5 32.0 19.7 (3,162.2) 4.8 26.0 114.8 5.5 19.5 16.0 12.9 28.5 3.4 3.5 6.0 8.0 6.5 6.4 5.1 5.6 5.9 100 0 100 100 100 0 100 20.1 36.6 190.0 8.1 22.3 28.4 17.3 23.9 41.7 205.8 9.0 25.9 30.9 20.1 (3.8) (0.5) 0.7 3.5 (12.7) (1.7) (1.5) (5.5) (2.6) 0.8 2.8 (7.2) (2.0) (8.9) Buy Neutral Buy Neutral (CBE) Buy Buy Neutral (CBE) RD RD RD RD MB RD RD
Consumer Staples
GNC Graincorp Sep-12 1,523.1 7.68 9.05 17.8 13.4 157 129 175 147 79.1 64.9 95.4 87.5 73.4 Arithmetic Average Weighted Average 8.8 8.8 8.8 10.5 10.5 10.5 68 93 5.3 5.3 5.3 5.8 5.8 5.8 0.6 0.6 0.6 0.6 0.6 0.6 14.5 39.6 39.6 5.2 5.2 5.2 100 84.3 66.7 3.7 9.1 Buy LP
Diversified Financials, Software & Services

AUB BTT FXL HFA IFL WHG IRE MOC SRV Austbrokers Holdings BT Investment Mgmt Flexigroup Limited HFA Holdings IOOF Holdings WHK Group IRESS Market Tech Mortgage Choice Ltd Servcorp Jun-12 Sep-12 Jun-12 Jun-12 Jun-12 Jun-12 Dec-11 Jun-12 Jun-12 342.3 495.6 550.9 99.7 1,270.7 224.0 857.7 172.7 265.8 6.30 1.85 2.00 0.85 5.53 0.85 6.96 1.44 2.70 7.15 2.05 2.40 0.80 6.20 0.85 7.40 1.30 3.50 13.5 10.8 20.0 (5.9) 12.1 0.6 6.3 (9.7) 29.6 11.5 11.7 19.5 (10.2) 11.7 2.7 7.1 (1.7) 30.3 24 36 59 (2) 82 24 49 15 14 27 45 65 5 89 28 55 16 41 27 43 60 6 100 26 58 15 14 29 50 66 12 107 30 62 16 41 44.3 13.5 21.2 (0.8) 35.6 9.0 39.0 13.1 14.0 49.6 16.8 23.3 2.5 38.6 10.4 43.8 13.3 41.9 44.2 16.4 19.2 7.5 48.1 9.4 45.5 13.4 (10.3) 48.9 54.2 14.9 17.5 20.8 22.8 3.0 5.8 43.2 46.2 9.4 10.9 45.3 49.0 13.0 13.2 14.0 41.9 Arithmetic Average Weighted Average 12.9 12.4 9.6 28.1 12.8 9.0 15.4 11.1 19.3 14.5 12.7 11.6 10.6 8.8 14.6 12.0 7.7 14.2 10.9 6.4 10.8 10.7 99 96 74 217 99 69 118 86 149 103 94 78 129 106 68 126 97 57 7.4 5.7 11.9 9.8 8.8 5.0 9.5 6.9 4.6 7.7 8.3 6.9 7.1 15.3 5.0 8.6 4.4 8.8 6.8 2.2 7.2 8.1 2.2 1.9 4.2 1.5 4.0 0.6 3.8 1.2 0.8 2.2 2.3 2.0 2.4 5.5 1.2 4.0 0.6 3.6 1.1 0.6 2.3 2.4 46.7 15.7 9.9 6.6 16.6 13.4 111.8 31.0 14.2 28.0 11.5 11.9 2.9 36.9 7.4 41.9 13.0 15.0 18.7 4.4 6.2 5.9 3.4 6.7 8.8 6.0 9.0 5.6 6.2 6.3 100 100 30 100 30 100 0 100 100 47.3 15.7 21.6 3.0 44.4 9.6 49.9 14.5 12.9 51.5 17.7 23.5 6.0 48.0 10.8 55.1 15.3 28.9 3.3 (5.6) (4.0) (0.4) (2.7) (1.9) (10.1) (11.9) 7.7 4.9 (1.2) (3.2) (2.2) (3.9) 1.1 (12.4) (16.1) 31.0 Buy Buy Buy Neutral Neutral (CBE) Neutral Neutral (CBE) Neutral (CBE) Buy LP LP LP LP LP LP RD LP LP
Health Care Equipment, Pharmaceuticals & Services

API IVC RHC RMD SIP Aust Pharm Ind Invocare Ltd Ramsay Health Care Resmed + Sigma Aug-12 Dec-11 Jun-12 Jun-12 Jan-12 144.0 814.7 3,801.1 29.3 665.4 0.30 7.55 18.81 37.61 0.58 0.30 7.70 17.00 23.41 0.50 1.7 2.0 (9.6) 242.8 (13.0) (0.8) 0.9 (15.7) 296.0 (21.6) 21 46 250 276 54 16 49 274 327 58 15 46 234 149 55 16 49 259 167 58 4.4 42.1 123.5 207.0 4.6 3.2 44.8 135.6 162.8 4.9 3.3 35.2 101.1 185.5 (2.9) 3.1 42.1 115.9 223.6 4.7 3.2 44.8 127.9 15.8 4.9 9.5 17.9 16.2 13.1 12.3 13.8 15.5 9.2 16.9 14.7 121.8 11.8 34.9 13.7 74 138 125 116 95 82 149 130 2 104 5.1 11.5 8.5 2.2 7.2 6.9 9.0 4.6 11.1 7.8 10.3 7.6 8.3 8.1 0.1 2.8 1.2 8.4 0.2 2.6 0.9 0.1 2.7 1.1 26.7 0.2 6.2 0.9 4.8 22.2 18.2 0.0 12.1 1.7 33.0 60.7 0.0 2.5 17.4 5.8 4.4 3.2 0.0 4.4 5.1 2.0 0 100 100 2 100 4.3 41.5 115.1 162.6 4.6 4.8 45.7 129.2 183.5 4.7 (39.0) 1.4 0.7 12.3 1.7 (50.1) (2.1) (1.0) 17.9 3.9 Neutral Neutral Sell Buy Sell AG MB AG AG
Media
APN AUN REA SXL TEN APN News & Media Austar United Comm. REA Group Southern Cross Media Ten Network Dec-11 Dec-11 Jun-12 Jun-12 Aug-12 270.9 1,506.7 1,669.7 818.6 925.0 0.73 1.19 13.00 1.16 0.89 0.80 1.50 14.00 1.80 1.00 9.6 26.6 7.7 55.2 13.0 9.8 17.4 3.4 58.1 13.2 80 76 83 96 59 80 98 100 112 70 80 76 83 100 59 80 98 100 112 70 12.9 6.0 64.1 13.7 5.7 13.0 7.7 77.1 15.9 6.7 12.1 4.9 53.1 13.3 7.1 12.9 13.0 6.0 7.7 64.1 77.1 14.1 15.9 5.7 6.7 Arithmetic Average Weighted Average 5.7 19.9 20.3 8.2 15.6 13.5 12.7 5.6 15.3 16.9 7.3 13.2 11.3 10.8 44 153 156 63 120 50 136 149 64 117 5.9 7.2 12.1 6.4 8.7 8.1 5.9 5.6 6.2 10.2 5.9 7.8 7.1 5.2 1.1 2.5 5.5 2.1 1.4 2.1 1.0 1.1 2.1 4.8 1.9 1.3 1.9 0.9 10.3 49.9 186.3 9.0 10.2 6.4 0.0 38.4 8.5 4.0 15.6 8.8 0.0 3.0 7.3 4.5 4.7 4.0 0 0 100 100 100 13.2 5.4 61.9 14.3 6.9 14.0 6.9 72.1 15.7 8.6 (2.5) 9.4 3.4 (1.4) (21.3) (8.0) 10.8 6.5 1.4 (28.7) Neutral (CBE) Buy (CBE) Neutral (CBE) Buy (CBE) Buy (CBE) LM RE RE LM LM

Excl-Abnormals
Source: UBS
ROCE 2012e
Frank 2012e %
Rating
Analyst
2012e $m
2013e $m
2012e %
2013e %
Retailing
AHE BRG DJS ORL PMV SFH SUL TRS WTF Automotive Holdings Breville Group David Jones OrotonGroup Premier Investments Specialty Fashion Super Retail Group Reject Shop Wotif.Com Holdings Jun-12 Jun-12 Jul-12 Jul-12 Jul-12 Jun-12 Jun-12 Jun-12 Jun-12 521.2 387.5 1,385.2 331.1 755.0 99.1 1,099.3 283.2 829.4 2.00 2.99 2.66 8.10 4.87 0.52 5.91 10.97 3.98 3.00 3.65 2.70 8.60 5.10 0.45 6.20 12.50 3.90 50.0 22.1 1.5 6.2 4.7 (13.5) 4.9 13.9 (2.0) 57.9 24.6 8.9 9.2 3.7 (6.4) 1.9 8.3 0.4 57 38 144 27 57 5 76 19 54 67 44 161 29 67 10 109 23 58 61 43 144 27 57 5 86 19 54 69 44 161 29 67 10 109 23 58 22.0 29.0 27.4 65.4 36.5 2.6 43.0 74.4 25.5 25.8 33.7 30.2 70.5 43.4 5.2 55.5 89.0 27.4 21.6 27.6 32.4 60.4 33.2 7.6 39.9 61.7 23.9 23.4 26.6 33.2 33.7 27.0 29.7 65.4 70.5 36.5 43.4 2.6 5.2 48.2 54.9 74.4 89.0 25.3 27.2 Arithmetic Average Weighted Average 8.6 9.0 9.9 12.4 13.3 20.1 12.3 14.7 15.7 12.4 11.4 7.5 8.9 8.9 11.5 11.2 10.0 10.8 12.3 14.7 10.3 10.1 66 70 76 95 103 155 95 114 121 67 79 79 102 99 89 95 109 130 6.8 5.1 5.6 7.2 nm 3.6 8.2 7.5 9.3 6.5 5.8 6.2 4.4 5.0 6.6 nm 2.9 6.3 6.3 8.6 5.7 5.1 0.3 0.8 0.8 1.9 (0.2) 0.2 0.9 0.6 5.4 1.1 0.5 0.3 0.7 0.7 1.8 (0.2) 0.2 0.7 0.5 5.0 1.0 0.5 12.6 45.7 23.3 99.2 7.2 12.9 20.7 33.6 107.4 17.0 18.5 23.0 55.6 36.0 0.0 30.3 27.0 22.8 23.5 8.5 6.2 8.6 6.9 7.4 0.0 5.1 2.5 5.7 5.9 6.2 0 0 100 0 0 0 0 0 100 23.2 29.1 26.3 66.4 37.4 2.5 50.1 77.1 26.2 26.1 31.5 27.5 73.4 42.7 6.1 56.8 95.2 28.9 0.8 12.2 2.4 (1.5) (2.3) 3.2 (4.0) (3.6) (3.6) 1.8 6.5 7.5 (4.1) 1.7 (17.5) (3.4) (7.0) (6.4) Buy Buy Sell Buy Neutral Neutral (CBE) Neutral (CBE) Buy Neutral (CBE) RD LP BG RD RD RD RD RD RD
Real Estate Managers & Developers

ALZ FKP PPC Australand Property FKP Ltd Peet Dec-11 Jun-12 Jun-12 1,482.5 752.5 240.5 2.57 0.64 0.80 2.90 0.86 1.15 12.8 35.4 43.8 11.6 32.2 38.3 140 124 18 144 134 24 140 124 18 144 134 24 24.2 10.4 5.7 25.0 11.3 7.5 23.2 10.3 14.6 24.2 25.0 10.4 11.3 5.7 7.5 Arithmetic Average Weighted Average 10.6 6.1 14.0 10.2 8.8 10.3 5.6 10.7 8.9 8.2 83 48 110 88 48 92 9.3 12.7 10.7 10.9 10.7 8.7 11.6 9.3 9.8 9.8 2.2 6.2 4.0 4.1 3.2 2.1 4.6 3.6 3.4 2.9 7.7 7.9 8.5 22.4 3.3 3.3 9.7 8.7 5.2 4.1 6.0 7.2 67 100 100 24.4 10.4 5.8 25.9 11.2 9.5 (0.7) 0.2 (1.6) (3.4) 0.9 (27.0) Buy Buy Buy JF JF JF
Real Estate Investment Trusts

AAD Ardent Leisure Group Jun-12 333.9 1.05 1.55 47.6 49.7 33 41 33 41 10.3 12.5 9.6 10.2 12.3 Arithmetic Average Weighted Average 10.3 10.3 10.3 8.5 8.5 8.5 80 76 5.1 5.1 5.1 4.6 4.6 4.6 1.1 1.1 1.1 1.0 1.0 1.0 8.4 12.0 12.0 11.4 11.4 11.4 0 12.6 14.0 (23.9) (13.9) Buy RD
Software & Services

ASZ CRZ OKN SMX ASG Group Carsales.com.au Oakton SMS Jun-12 Jun-12 Jun-12 Jun-12 142.3 1,108.5 112.6 342.1 0.83 4.73 1.20 5.01 1.15 5.40 2.00 5.75 38.6 14.2 66.7 14.8 39.0 10.0 73.3 11.8 16 64 15 31 18 70 18 33 16 64 15 31 18 70 18 33 9.1 27.4 16.3 45.5 10.3 30.3 19.0 49.1 9.6 24.4 17.5 42.7 9.1 10.3 26.7 29.6 16.2 18.8 44.5 48.1 Arithmetic Average Weighted Average 9.1 17.7 7.4 11.3 11.4 13.8 8.1 16.0 6.4 10.4 10.2 12.4 70 137 57 87 71 141 56 92 5.1 11.6 5.1 7.5 7.3 8.9 4.6 10.5 4.9 6.8 6.7 8.0 0.9 6.5 0.6 1.0 2.3 2.0 0.9 5.9 0.7 0.9 2.1 1.9 19.1 118.7 20.4 50.6 7.0 21.8 11.3 31.2 17.9 8.5 4.6 9.4 6.2 7.2 5.6 0 100 100 0 9.7 28.0 16.4 45.3 10.5 31.8 18.4 50.1 (6.0) (4.8) (1.5) (1.8) (1.9) (7.5) 2.4 (4.2) Buy Neutral (CBE) Buy Buy RD LM RD RD
Transportation
AIX BCS MQA MRM QRN QUB VBA Australian Infr Fund BrisConnections Macq Atlas Road Grp Mermaid Marine Aust QR National Qube Logistics Virgin Australia Jun-12 Jun-12 Dec-11 Jun-12 Jun-12 Jun-12 Jun-12 1,238.4 331.6 726.6 648.6 9,076.8 1,174.8 707.3 2.00 0.850 1.57 3.01 3.72 1.47 0.32 2.25 2.15 3.60 3.40 1.50 0.50 12.8 37.4 19.6 (8.6) 2.4 56.3 11.5 31.2 21.2 (12.9) (5.1) 47.6 144 30 52 409 60 74 184 21 58 543 70 118 144 30 52 395 60 74 184 21 58 504 70 118 23.2 6.3 24.1 16.8 7.3 3.3 29.6 4.3 26.9 22.3 8.0 5.3 34.2 12.9 20.7 9.0 6.6 (2.1) 23.2 29.6 6.3 4.3 23.7 26.4 16.2 20.7 7.3 8.0 3.3 5.3 Arithmetic Average Weighted Average 8.6 24.9 12.7 23.0 20.1 9.6 16.5 18.1 6.7 36.4 11.4 18.0 18.4 6.0 16.2 14.3 66 nm 192 98 177 155 74 60 nm 323 101 159 163 53 9.6 nm nm 6.4 9.0 12.0 4.3 8.2 3.1 8.6 nm nm 5.7 7.6 10.0 3.5 7.1 2.7 8.6 nm (178.5) 2.0 2.8 1.5 0.4 (27.2) 0.7 7.9 nm (68.1) 1.8 2.6 1.3 0.4 (9.0) 0.7 8.6 nm 0.7 20.8 7.8 9.0 7.9 11.0 6.0 10.8 10.0 3.6 0.0 6.9 5.5 3.8 3.6 2.7 2.5 0.0 3.0 2.8 60 100 30 0 0 20.3 15.4 23.7 16.9 8.2 2.6 23.3 (11.6) 26.7 21.8 9.6 4.5 12.5 (145.3) (0.0) (4.4) (12.3) 21.9 21.4 370.2 (1.0) (5.5) (20.5) 15.8 Buy Sell Buy Buy Neutral Neutral Buy HX HX HX MB SM SM SM

Excl-Abnormals
Source: UBS
ROCE 2012e
Frank 2012e %
Rating
Analyst
2012e $m
2013e $m
2012e %
2013e %
Utilities
APA IFN DUE HDF SPN SKI APA Group Infigen Energy DUET Hastings Div Utils SP AusNet Spark Infrastructure Jun-12 Jun-12 Jun-12 Dec-11 Mar-12 Dec-11 3,081.6 217.2 1,975.8 1,087.8 2,779.7 1,764.6 4.82 0.29 1.81 2.09 0.98 1.33 4.65 0.29 1.82 2.40 1.00 1.40 (3.5) 1.8 0.6 14.8 2.6 5.3 (4.3) (5.1) 0.9 12.0 3.4 3.5 137 (39) 96 23 232 176 157 (33) 104 27 241 147 137 (39) 96 23 205 176 157 (33) 104 27 213 147 21.3 (5.1) 9.6 4.4 8.2 13.3 23.9 (4.3) 9.4 5.2 8.4 11.0 19.5 (3.4) 13.9 1.7 8.3 8.2 21.3 23.9 (5.1) (4.3) 9.6 9.4 4.4 5.2 7.2 7.4 13.3 11.0 Arithmetic Average Weighted Average 22.6 nm 18.9 47.7 13.5 10.0 22.0 17.1 20.2 nm 19.3 40.5 13.2 12.0 17.9 13.1 174 nm 145 368 104 77 178 nm 170 358 117 107 11.1 6.9 9.3 15.9 8.1 0.4 8.6 6.2 10.8 6.5 8.8 14.2 7.8 nm 9.6 5.5 5.1 3.9 5.7 11.1 4.8 0.3 4.1 3.7 5.1 3.6 5.4 10.2 4.6 (0.1) 3.8 3.5 9.5 0.7 8.5 6.4 8.4 11.2 35.1 0.0 16.0 11.0 8.0 9.7 12.6 7.3 0.0 8.8 5.3 8.2 7.3 7.3 7.6 0 0 0 0 36 0 20.0 (4.5) 9.7 7.2 8.1 12.6 21.5 (2.7) 10.5 3.1 8.4 13.9 6.2 11.7 (1.0) (64.2) (11.8) 5.2 10.1 37.2 (11.7) 39.9 (13.6) (25.8) Neutral Neutral Buy Buy Neutral Neutral DL DL DL DL DL DL
2011a %
EPS Growth (normalised) 2012e 2013e % %
2014e %
2011a x
Price Earnings Ratio (norm.) 2012e 2013e x x
EV/EBITDA 2014e x 2011a x 2012e x 2013e x 2014e x 2011a %
Dividend Yield 2012e %
2013e %
2014e %
Emerging Industrials (ex 100)

Emerging Industrials (ex 100) excluding Financials


Notes: Weighted Averages calculated from aggregated sample figures, e.g. P/E = (S market cap)/(S net profit). Market Arithmetic Averages calculated as the sample mean, excluding outliers. Sector Arithmetic Averages calculated as the sample mean. Relative P/E's for non-bank are calculated relative to the industrials Arithmetic Average excluding Banks and Insurance Individual Sector data is weighted by market capitalisation Ranges: EPS Growth -25% to +50% U.R. denotes Under Review. Stocks may be flagged as UR by the analyst, indicating that the stock's price target and/or rating are subject to possible change in the near term, usually in response to an event that may affect the investment case or valuation. CBE: denotes Core Band Exception. The standard UBS band for Neutral stocks is -6% to +6%. Any stocks with a modified band are denoted by CBE. Source of Consensus EPS is Thomson Financial
Premium/(Discount) - Arithmetic Averages (%)

Emerging Industrials ex Fin. vs Industrials ex Fin. 2.1 1.0 3.6 (0.3) 2.2 1.0 (0.4) (2.6) 0.2 (2.2) (3.7) (4.0) (4.9) (1.5) (2.0) 1.0
Emerging Companies Team LP - Lachlan Parker RD - Ray David MB - Martin Byers
Sector Analysts AG - Andrew Goodsall BG - Ben Gilbert CW - Chris Williams
DL - David Leitch HX - Han Xu JM - Jonathan Mott
JF - John Freedman LM - Lauren Moran RE - Richard Eary
RL - Ramoun Lazar ST - Sam Theodore SM - Simon Mitchell
Resources Earnings, Dividend & Valuation Sheet

ASX Code $ Company/Sector Y/E Price 1-Feb 12 Mth Price Target $ F/cast Excess Return % Net Present Value $ Prem / (Disc.) to NPV % Reported Net Profit 2012e $m 2013e $m 2011a $m Rep. Net Profit Excl-Abnormals 2012e $m 2013e $m Reported EPS 2012e c 2013e c 2011a c Adjusted EPS (pre-exceptional) 2012e c 2013e c Price Earnings Ratio (norm.) 2012e x 2013e x PER Relative
(Resources)
Source: UBS
Free Cashflow Per Share 2012e c 2013e c EV/EBITDA 2012e x 2013e x ROCE 2012e % Dividend 2012e c Dividend Yield 2012e % Frank 2012e % Consensus EPS 2012e c 2013e c between Consensus 2012e % 2013e % Rating 2012e % 2013e %
Energy
AUT AWE BND BPT CTX HZN KAR ORG OSH ROC STO TAP WOR WPL Aurora Oil & Gas AWE Limited Bandanna Energ Beach Energy Ltd Caltex Australia Horizon Oil Limite Karoon Gas Aust Origin Energy Oil Search ROC Oil Santos Tap Oil Ltd WorleyParsons L Woodside Petrole Dec-11 Jun-12 Jun-12 Jun-12 Dec-11 Jun-12 Jun-12 Jun-12 Dec-11 Dec-11 Dec-11 Dec-11 Jun-12 Dec-11 2.95 1.50 0.66 1.46 12.88 0.24 5.01 13.38 6.56 0.34 13.32 0.80 27.60 34.00 3.84 1.83 1.30 1.50 12.42 0.45 8.24 17.74 8.75 0.37 17.33 1.18 28.75 38.35 22.0 3.49 16.7 1.73 85.4 1.74 (6.3) 0.94 (6.8) 10.43 78.9 0.29 50.4 3.62 24.0 24.5 7.59 0.2 0.37 22.4 16.75 42.7 1.02 2.4 6.6 31.06 Arithmetic Average Weighted Average (15.4) (13.7) (62.4) 55.5 23.5 (16.6) 38.2 (13.6) (9.2) (20.5) (21.7) 9.5 (3.9) 30.8 125 66 (4) 65 240 24 (29) 874 171 44 569 9 359 1,754 193 40 (13) 41 388 37 (39) 1,001 122 40 534 (3) 418 2,198 36 (15) (4) 34 262 17 (19) 673 214 2 475 9 299 1,580 125 42 (4) 65 287 24 (29) 874 171 44 569 9 359 1,754 193 40 (13) 41 420 37 (39) 1,001 122 40 534 (3) 418 2,198 30.3 12.6 (0.8) 5.9 89.1 2.1 (13.2) 80.4 13.0 6.1 61.0 3.8 146.1 217.7 47.1 7.7 (2.6) 3.7 143.6 3.2 (14.5) 89.0 9.2 5.4 57.3 (1.4) 170.0 272.8 8.9 (2.8) (1.1) 3.1 97.2 1.5 (9.3) 71.0 16.1 0.2 53.2 3.6 121.0 199.0 30.3 8.1 (0.8) 5.9 106.5 2.1 (13.2) 80.4 12.9 6.1 61.0 3.8 144.6 217.7 47.1 7.7 (2.5) 3.7 155.4 3.2 (14.5) 89.0 9.2 5.4 57.3 (1.4) 168.2 272.8 9.7 18.6 nm 25.0 12.1 11.2 nm 16.6 nm 5.6 21.8 21.2 19.1 15.6 16.0 15.9 6.3 19.4 nm 39.4 8.3 7.4 nm 15.0 nm 6.2 23.3 nm 16.4 12.5 15.4 13.7 75 137 nm 184 89 83 nm 123 nm 41 161 156 141 120 55 176 nm 358 75 68 nm 137 nm 57 211 nm 149 110 (29.5) (22.0) (12.7) 10.1 61.3 (3.8) (103.8) (107.0) (53.9) (1.0) (187.1) (9.6) 91.1 49.8 5.0 (6.8) (99.4) 10.1 112.3 (2.2) (67.1) (94.0) (32.8) 6.4 49.9 (23.0) 130.4 96.5 6.3 4.4 nm 7.0 5.9 5.5 nm 8.8 25.0 1.5 8.2 4.2 10.4 8.0 7.9 9.0 4.1 4.8 nm 8.2 4.6 3.5 nm 6.3 39.6 1.1 8.0 18.8 9.6 6.5 9.6 7.6 47.4 8.0 (14.9) 7.7 11.5 22.5 (10.0) 10.3 8.6 56.7 9.5 5.9 22.9 15.1 0.0 5.0 0.0 1.8 54.0 0.0 0.0 50.0 3.8 0.0 30.0 0.0 102.0 108.6 0.0 3.3 0.0 1.2 4.2 0.0 0.0 3.7 0.6 0.0 2.3 0.0 3.7 3.2 1.6 2.7 0 0.5 0 0 100 0 0 100 0 0 100 0 25.8 100 30.2 5.9 (0.6) 5.1 116.6 1.2 (20.1) 81.2 12.2 4.9 64.3 0.6 154.3 222.1 52.4 8.8 (0.3) 6.9 138.5 2.6 (20.6) 86.9 12.1 7.6 72.7 1.1 184.6 281.3 0.4 26.8 21.1 12.8 (9.5) 41.9 (52.5) (1.0) 5.3 19.9 (5.4) 84.0 (6.7) (2.0) (11.4) Buy (14.2) Buy 87.9 Buy (86.3) Neutral 10.9 Neutral (CBE) 18.6 Buy (41.7) Buy 2.4 Buy (31.6) Buy (39.8) Neutral (26.9) Buy 176.3 Buy (9.7) Neutral (3.1) Buy
Gold
AVO BDR NCM PRU Alacer Gold Corp Beadell Resource Newcrest Mining Perseus Mining Dec-11 Dec-11 Jun-12 Jun-12 8.76 0.76 33.50 2.83 11.90 1.50 41.00 4.80 22.6 10.01 92.7 1.48 14.7 33.79 58.6 4.08 Arithmetic Average Weighted Average (12.5) (48.8) (0.9) (30.6) (23.2) (5.5) 298 47 1,502 99 319 142 2,460 133 175 (29) 1,058 (51) 298 47 1,507 99 319 142 2,460 133 108.5 7.1 196.3 21.7 116.1 21.5 321.4 29.1 63.7 (4.5) 145.7 (12.1) 108.5 7.1 197.0 21.7 116.1 21.5 321.4 29.1 8.1 10.6 17.0 13.0 12.2 15.1 7.5 3.5 10.4 9.7 7.8 9.8 62 78 125 96 67 32 95 88 61.1 (2.7) (13.0) 9.4 42.9 22.9 289.8 19.1 4.6 7.1 9.4 7.1 7.1 8.3 4.4 1.8 6.0 4.0 4.0 5.5 31.0 58.1 15.0 56.8 0.0 0.0 43.0 0.0 0.0 0.0 1.3 0.0 0.3 1.1 0 0 0 0 78.9 8.2 178.2 19.4 97.6 20.5 257.6 34.6 27.3 (14.8) 9.5 10.8 15.9 4.9 19.9 (18.9) Buy Buy Buy Buy
Metals & Mining

AGO AKM AWC AQP AZT BCI BHP BTU DML ERA FMG GBG GCL GNM GRR GUF ILU IVA KZL MCR MGX OZL PAN PDN PEM PLA PNA RIO RRL SFR WHC WSA Atlas Iron Aspire Mining Alumina Ltd Aquarius Pltm Aston Resources BC Iron Limited BHP Billiton Limit Bathurst Resourc Discovery Metals Energy Resource Fortescue Metals Gindalbie Metals Gloucester Coal Gujarat NRE Cok Grange Resource Guildford Coal Iluka Resources Ivanhoe Australia Kagara Limited Mincor Mt Gibson Iron Lt OZ Minerals Panoramic Resou Paladin Energy Perilya Limited Platinum Australi PanAust Rio Tinto Regis Resources Sandfire Resourc Whitehaven Coal Western Areas Jun-12 Jun-12 Dec-11 Jun-12 Jun-12 Jun-12 Jun-12 Jun-12 Jun-12 Dec-11 Jun-12 Jun-12 Jun-12 Mar-12 Dec-11 Jun-12 Dec-11 Dec-11 Jun-12 Jun-12 Jun-12 Dec-11 Jun-12 Jun-12 Dec-11 Jun-12 Dec-11 Dec-11 Jun-12 Jun-12 Jun-12 Jun-12 3.04 0.38 1.26 2.32 9.49 2.78 36.91 0.65 1.56 1.33 4.98 0.63 8.29 0.19 0.60 0.80 17.59 1.84 0.35 0.74 1.37 10.78 1.26 1.82 0.41 0.09 3.50 68.74 3.89 7.17 5.65 5.53 3.90 0.45 2.70 3.70 11.00 3.50 50.00 1.00 2.00 1.30 7.00 1.20 10.50 0.21 0.82 1.40 20.00 2.25 0.47 0.76 1.40 11.10 2.50 2.65 0.75 0.10 5.20 110.00 4.60 9.30 8.00 5.40 19.1 9.8 0.46 109.0 2.72 35.3 6.1 10.97 24.7 4.11 29.1 50.59 42.9 1.05 20.8 1.88 (24.2) 0.60 32.1 6.87 83.4 0.61 18.0 10.62 (0.9) 38.4 0.98 58.0 1.41 8.1 15.53 10.7 2.15 27.6 0.60 (5.7) 0.85 3.7 1.93 (2.9) 11.11 81.5 2.54 35.4 2.64 74.3 0.69 (4.5) 0.11 39.5 4.22 52.4 106.23 6.9 3.99 18.2 8.97 35.5 8.02 (8.7) 4.72 Arithmetic Average Weighted Average (18.3) (53.9) (13.5) (32.3) (27.0) (37.9) (16.9) 122.3 (27.6) 2.8 (21.9) (39.0) (43.4) 13.3 (14.7) (41.7) (13.0) (28.9) (3.0) (50.5) (31.1) (41.4) (20.6) (17.0) (35.3) (2.5) (20.1) (29.5) 17.2 (18.1) (28.8) 245 (15) 88 (63) 213 67 19,295 (10) (2) (112) 1,794 13 37 (6) 136 (7) 1,162 (44) 12 7 317 238 (5) (29) 38 (7) 190 15,460 89 15 137 78 401 (4) 240 106 (6) 117 18,970 4 108 (100) 2,438 91 32 10 163 15 1,145 (29) 21 8 560 300 17 2 37 (3) 189 16,740 225 153 254 73 169 (4) 127 (10) 65 3 21,985 (13) (15) (55) 1,103 12 53 21 125 (5) 525 (44) 2 (6) 240 310 26 (65) 40 (12) 131 14,703 37 (27) 73 135 237 (15) 91 (63) (4) 67 19,295 (10) (2) (112) 1,794 13 11 17 136 (7) 1,162 (44) 12 7 317 238 (3) (29) 38 (7) 190 15,460 89 15 137 78 401 (4) 272 106 (6) 117 18,970 4 108 (100) 2,438 91 32 10 163 15 1,145 (29) 21 8 560 300 17 2 37 (3) 189 16,740 225 153 254 73 27.5 (2.4) 3.6 (13.5) 104.1 70.7 362.4 (1.4) (0.4) (21.7) 57.6 1.0 18.4 (0.6) 11.8 (1.5) 277.6 (8.1) 1.5 3.3 29.3 77.0 (2.6) (3.5) 4.9 (1.5) 33.0 826.7 20.3 10.2 27.8 43.2 45.1 (0.6) 9.8 22.6 (3.0) 123.1 356.3 0.6 24.7 (19.2) 78.3 7.3 15.9 1.0 14.2 3.3 273.5 (5.3) 2.7 3.9 51.8 97.0 8.4 0.3 4.7 (0.6) 32.8 895.2 51.5 102.6 51.4 40.3 26.7 (0.6) 5.2 (2.2) 32.3 3.0 395.1 (2.8) (3.4) (20.0) 35.3 1.3 37.3 2.0 10.9 (1.2) 125.5 (9.6) 0.3 (2.9) 22.1 97.0 12.5 (8.6) 5.0 (3.1) 22.0 780.8 8.0 (18.2) 14.8 75.1 26.6 (1.7) 3.7 (13.5) (1.9) 63.8 360.5 (1.3) (0.4) (21.7) 57.6 1.0 5.5 1.7 11.8 (1.5) 277.6 (8.1) 1.5 3.3 29.2 77.0 (1.6) (3.4) 4.9 (1.5) 32.7 821.0 20.3 10.2 27.3 43.2 45.1 (0.4) 11.1 22.6 (2.8) 111.2 354.4 0.6 24.7 (19.2) 78.2 7.2 15.9 0.9 14.2 3.3 273.5 (5.3) 2.7 3.9 51.7 97.0 8.3 0.3 4.7 (0.6) 32.5 889.0 51.5 102.6 50.5 40.3 11.4 nm 33.6 nm nm 4.4 10.2 nm nm nm 8.7 nm nm 11.2 5.1 nm 6.3 nm 24.0 22.5 4.7 14.0 nm nm 8.3 nm 10.7 8.4 19.1 nm 20.7 12.8 13.1 9.4 6.7 nm 11.3 10.3 nm 2.5 10.4 nm 6.3 nm 6.4 8.7 nm 19.9 4.2 24.1 6.4 nm 13.2 18.8 2.7 11.1 15.2 nm 8.6 nm 10.8 7.7 7.6 7.0 11.2 13.7 10.2 8.8 84 nm 259 nm nm 32 79 nm nm nm 67 nm nm 82 37 nm 47 nm 177 165 35 103 nm nm 62 nm 83 65 141 nm 153 94 61 nm 100 91 nm 23 92 nm 56 nm 56 79 nm 181 39 219 58 nm 120 171 24 101 138 nm 78 nm 95 68 69 64 102 125 24.1 (2.4) 3.7 (15.5) (134.7) 77.0 137.0 (7.0) (46.0) (14.2) (107.8) (68.3) (67.0) (10.5) 10.3 (3.6) 276.6 (37.0) 1.2 4.3 26.0 86.6 10.7 (8.0) 3.6 0.9 33.8 507.3 3.3 (188.9) (2.2) 38.4 29.3 (6.5) 11.1 16.3 (135.1) 120.7 174.1 (3.9) 22.0 12.0 (32.3) (3.7) (20.4) (9.1) 12.6 1.1 270.3 (31.1) (5.7) 10.8 57.3 118.4 25.7 (25.9) 8.3 0.0 44.9 623.0 51.7 128.6 (0.8) 43.3 7.2 nm nm 11.8 nm 2.1 5.9 nm nm nm 5.9 nm 15.9 8.5 2.1 nm 3.9 nm 6.3 3.0 1.8 6.4 4.2 28.6 2.5 nm 5.3 5.2 15.6 33.4 11.4 6.0 8.8 5.7 3.8 nm nm 5.5 nm 0.6 5.1 31.7 3.9 nm 4.8 7.8 11.3 7.9 1.5 8.5 3.8 nm 3.1 2.1 0.7 5.0 2.1 17.1 1.8 1.8 4.8 4.5 5.0 3.5 6.7 6.6 6.0 4.8 20.7 (75.1) 3.3 6.7 (1.9) 127.7 41.4 (9.5) (0.4) (28.5) 45.4 0.8 2.0 5.2 34.2 (8.4) 115.3 (34.2) 3.6 4.1 46.3 13.5 (4.9) 1.2 13.5 (12.4) 41.2 29.2 47.4 10.5 19.0 32.4 5.0 0.0 6.0 11.3 0.0 8.0 109.0 0.0 0.0 0.0 7.5 0.0 0.0 0.0 4.0 0.0 138.0 0.0 0.0 1.0 13.0 43.0 0.0 0.0 0.0 0.0 0.0 135.3 0.0 0.0 13.0 13.0 1.6 0.0 4.8 4.9 0.0 2.9 3.0 0.0 0.0 0.0 1.5 0.0 0.0 0.0 6.7 0.0 7.8 0.0 0.0 1.3 9.5 4.0 0.0 0.0 0.0 0.0 0.0 2.0 0.0 0.0 2.3 2.3 1.5 2.6 0 0 0 0 0 0 100 0 0 0 0 0 0 0 0 0 100 0 0 0 0 0 0 0 0 0 0 100 0 0 100 0 22.2 (1.0) 2.0 9.2 (2.3) 66.5 371.6 0.5 (2.6) (6.0) 54.5 0.3 25.9 3.4 9.8 (1.7) 294.0 (2.5) 3.0 5.1 32.8 76.1 11.3 1.8 6.1 (1.1) 35.2 755.1 15.5 (7.5) 30.2 37.8 35.9 0.4 8.7 28.4 2.4 97.2 407.4 6.2 20.6 (2.0) 68.0 7.6 40.3 6.0 6.5 0.6 350.2 9.4 4.9 3.0 44.6 92.0 12.3 7.3 7.4 3.6 42.0 852.3 64.5 122.2 48.3 47.2 16.6 41.0 47.0 168.1 (21.2) (4.2) (3.1) 138.2 (599.1) 72.4 5.2 70.0 (368.4) (105.4) 17.0 (12.4) (5.9) 69.1 (105.5) (55.8) (12.2) 1.1 799.5 152.7 (25.8) 26.5 (7.6) 8.0 23.8 173.8 (10.7) 12.5 20.5 Buy 190.0 Neutral (CBE) 21.6 Buy (25.5) Neutral (CBE) 185.2 Buy 12.6 Buy (14.9) Buy (1,020.3) Buy 16.5 Buy 89.6 Neutral 13.1 Buy (5.2) Buy (152.9) Buy (544.7) Neutral 54.1 Buy 81.9 Buy (28.0) Buy 278.3 Buy (84.1) Buy 23.2 Sell 13.7 Neutral 5.2 Neutral (48.9) Buy (2,516.4) Buy (57.7) Buy 692.3 Neutral (CBE) (29.0) Buy 4.1 Buy (25.2) Buy (19.1) Buy 4.4 Buy (17.0) Sell
Resources Earnings, Dividend & Valuation Sheet

ASX Code $ Company/Sector Y/E Price 1-Feb 12 Mth Price Target $ F/cast Excess Return % Net Present Value $ Prem / (Disc.) to NPV % Reported Net Profit 2012e $m 2013e $m 2011a $m Rep. Net Profit Excl-Abnormals 2012e $m 2013e $m Reported EPS 2012e c 2013e c 2011a c Adjusted EPS (pre-exceptional) 2012e c 2013e c Price Earnings Ratio (norm.) 2012e x 2013e x PER Relative
(Resources)
Source: UBS
Free Cashflow Per Share 2012e c 2013e c EV/EBITDA 2012e x 2013e x ROCE 2012e % Dividend 2012e c Dividend Yield 2012e % Frank 2012e % Consensus EPS 2012e c 2013e c between Consensus 2012e % 2013e % Rating 2012e % 2013e %
Steel
BSL SGM OST BlueScope Steel Jun-12 Sims Metal Mgmt Jun-12 OneSteel Jun-12 0.41 14.92 0.73 0.72 17.34 1.65 71.6 1.86 11.4 14.36 123.9 3.26 Arithmetic Average Weighted Average (78.2) 3.9 (77.8) (50.7) (51.7) (367) 225 193 281 254 477 (118) 182 230 (52) 225 242 316 254 477 (12.4) 112.1 14.4 8.4 135.9 35.5 (6.4) 88.4 17.3 (1.8) 112.1 18.1 9.5 135.9 35.5 nm 13.3 4.0 8.7 8.3 4.3 11.0 2.0 5.8 5.4 nm 98 30 39 100 19 0.2 107.1 (3.2) 5.3 132.0 7.4 5.6 6.5 4.8 5.6 6.3 1.7 5.3 2.9 3.3 3.5 (0.7) 11.8 7.0 0.0 55.0 5.0 0.0 3.7 6.9 3.5 3.2 0 50.909091 100 (1.0) 109.9 13.7 5.5 148.0 25.1 43.2 1.9 24.2 42.0 (8.9) 29.4 Neutral (CBE) Buy Buy
Prem / (Disc.) to NPV
EPS Growth d) 2011a % (0.1) na 2012e % 1.6 0.9 2013e % 2.6 11.4 2014e % 9.5 (4.4) 2011a x 19.9 10.8
Price Earnings Ratio (norm.) 2012e x 13.6 10.7 2013e x 11.0 9.6 2014e x 12.6 10.1 2011a x 9.5 7.1
EV/EBITDA 2012e x 8.0 6.2 2013e x 6.5 5.1 2014e x 6.1 5.1 2011a % 1.7 2.3
Dividend Yield 2012e % 1.6 2.5 2013e % 2.3 2.8 2014e % 2.6 2.8
Notes: Weighted Averages calculated from aggregate figures, e.g. P/E = (S market cap)/(S net profit). Arithmetic Averages calculated as the sample mean, excluding outliers. Relative P/E's for non-bank are calculated relative to the industrials Arithmetic Average excluding Banks & Insurance Individual Sector data is weighted by market capitalisation Ranges: EPS Growth -25% to +50% P/E 0 to 50 Div Yld 0% to 20% U.R. denotes Under Review. Stocks may be flagged as UR by the analyst, indicating that the stock's price target and/or rating are subject to possible change in the near term, usually in response to an event that may affect the investment case or valuation. CBE: denotes Core Band Exception. The standard UBS band for Neutral stocks is -6% to +6%. Any stocks with a modified band are denoted by CBE. Source of Consensus EPS is Thomson Financial
Resources
Arithmetic Averag (14.4) 0.8 Weighted Averag
Commodity Price Assumpti

Precious Metals Gold US$/oz Silver US$/oz Platinum US$/oz Base Metals Aluminium Copper Lead Nickel Tin Zinc
2011a Jun-11
Dec-11
2012e Jun-12
Dec-12
2013e Jun-13
Dec-13
2014e Jun-14
Dec-14
2015e Jun-15
Dec-15
Source: UBS LT Ave
1,448.4 35.2 1,791.1
1,694.6 35.3 1,651.5
2,075.0 35.2 1,637.5
2,025.0 34.8 1,712.5
1,825.0 30.0 1,900.0
1,625.0 25.0 1,900.0
1,400.0 20.0 1,980.0
1,400.0 20.0 1,980.0
1,300.0 16.5 2,018.6
1,300.0 18.0 2,043.7
1,100.0 13.3 1,823.1
USc/lb USc/lb USc/lb USc/lb USc/lb USc/lb
116.0 426.3 116.9 1,160.5 1,333.3 105.4 396.9 256.6 287.1 277.5 114.0 121.2 770.0 1,400.0 111.2 60.2 1.035 6.769 0.711
101.7 373.1 100.6 914.4 1,031.0 93.4 352.3 269.5 295.4 300.0 130.0 145.0 1,325.0 2,310.0 111.2 52.2 1.031 8.090 0.725
100.0 370.0 97.5 885.0 900.0 100.0 347.5 255.5 279.8 222.5 127.5 200.0 2,440.0 2,460.0 107.5 55.0 1.000 8.000 0.742
102.0 350.0 97.5 910.0 750.0 105.0 350.0 247.4 270.9 185.0 125.0 200.0 2,440.0 2,450.0 102.5 55.0 1.000 8.008 0.742
115.0 325.0 90.0 940.0 600.0 102.5 365.0 250.6 274.4 182.5 117.5 180.0 2,000.0 2,200.0 97.0 60.0 0.977 8.023 0.739
115.0 315.0 90.0 940.0 460.0 97.5 365.0 238.1 260.7 165.0 110.0 180.0 1,800.0 2,000.0 97.0 60.0 0.946 8.038 0.734
120.0 270.0 90.0 930.0 440.0 95.0 350.0 227.1 248.7 162.5 104.0 160.0 1,400.0 1,800.0 95.0 65.0 0.915 8.054 0.730
120.0 260.0 80.0 930.0 420.0 85.0 320.0 166.4 182.2 155.0 98.0 160.0 1,000.0 1,800.0 95.0 65.0 0.885 8.069 0.726
125.0 285.0 110.0 930.0 400.0 95.0 310.0 155.9 170.8 150.0 96.5 150.0 800.0 1,400.0 95.0 65.0 0.854 8.085 0.722
125.0 285.0 110.0 930.0 395.0 95.0 310.0 139.9 158.2 150.0 95.0 150.0 800.0 1,400.0 95.0 65.0 0.823 8.100 0.717
110.0 255.0 100.0 820.0 345.0 85.0 275.0 115.2 137.6 130.0 85.0 125.0 650.0 1,250.0 83.5 60.0 0.800 8.100 0.714
Bulk Commodities Alumina (Spot) US$/t Iron Ore - Fines* USc/LTU Iron Ore - Lumps USc/LTU Coking Coal* US$/t Steaming Coal* US$/t Industrial Minerals Ilmenite** A$/t Rutile** A$/t Zircon** A$/t Other Oil (Brent) US$/bbl Uranium US/lb US$/A$ US$/Rand US$/Euro * Japanese Benchmark price ** Contract price
2009 dollars
New Zealand - Earnings, Dividend & Valuation Sheet

NZX Code Company/ Sector Y/E Price 1-Feb $ 12 Mth Price Target $ 12 Mth Price Upside $ Reported Net Profit 2010 2011 2012e $m $m $m Rep. Net Profit Excl-Abnormals 2010 2011 2012e $m $m $m Normalised EPS (adj for full tax,gwill amort, abs) 2009 2010 2011 2012e c c c c Price Earnings P/E Relative EV/EBIT EV/EBITDA Dividend Ratio (norm.) (inc.Indus, ex.Fin & Prop) Cash DPU 2009 2010 2011 2012e 2009 2010 2011 2012e 2010 2011 2012e 2010 2011 2012e 2010 2011 2012e x x x x % % % % x x x x x x c c c Cash Div Yield 2011 % Gross Div Yield 2011 % Price to Book 2010
Source: UBS
Rating
Agriculture & Food

GFF NZS PGW Goodman Fielder Limited NZ Farming Systems Uruguay Limited PGG Wrightson Jun 12 #N/A Jun 12 0.67 0.60 0.38 0.57 #N/A 0.54 -15% 42% 202.2 (217.5) 150.6 23.3 (30.7) 26.2 230.3 21.1 173.9 13.2 163.5 26.2 14.2 8.1 15.6 3.9 11.8 9.1 4.7 4.7 4.7 4.7 8.2 4.3 9.8 7.1 5.3 10.6 5.7 21.8 13.7 8.5 12.3 7.3 11.0 9.1 8.0 10.2 1.7 3.5 Arithmetic average Weighted average 7.5 9.0 29 25 35 45 ##### #### ##### #### 28 57 133 67 8.8 9.1 9.0 8.9 6.6 9.5 12.0 10.7 9.9 14.2 7.1 8.0 7.5 7.2 8.0 7.5 8.2 7.8 7.6 2.4 7.6 9.9 8.7 8.0 3.6 5.5 6.6 6.1 5.7 2.9 12.6 0.0 9.4 0.0 9.4 0.0 #DIV/0! #DIV/0! 7.0 5.5 5.5 7.6 14.0 15.1 0.0 #DIV/0! #DIV/0! 8.3 0.5 0.4 0.5 0.5 0.6 Neutral Not Rated Buy
AIR
Airlines
Air New Zealand
Jun 12
0.92
1.19
29%
82.0
81.0
98.4
92.0
81.0
98.4
11.2
8.6
50
62
75
62
Buy
Building Materials & Construction

FBU# NPX Fletcher Building Nuplex Industries Jun 12 Jun 12 6.44 2.46 8.50 2.80 32% 14% 272.0 64.2 283.0 66.5 330.4 54.3 275.3 77.6 359.0 70.5 340.4 59.8 51.9 20.2 45.4 40.4 55.7 50.2 35.8 30.2 Arithmetic average Weighted average 12.4 12.2 12.3 12.4 14.2 6.1 10.1 13.4 11.6 6.9 9.2 11.1 12.8 8.2 10.5 12.4 75 74 83 35 70 42 78 50 11.1 5.0 8.0 10.5 10.9 6.3 8.6 10.4 10.0 6.4 8.2 9.6 8.1 4.2 6.1 7.7 8.1 5.2 6.7 7.8 7.1 5.0 6.0 6.9 29.0 21.0 33.0 21.0 33.0 21.0 5.1 8.5 6.5 4.9 6.1 8.5 7.3 6.4 1.3 0.9 1.1 1.3 Buy Buy
Cyclicals - other
CCC FPA THL Cavotec MSL Holdings #N/A Fisher & Paykel Appliances Holdings Ltd Mar 12 Tourism Holdings Limited #N/A #N/A 0.35 0.59 #N/A 0.40 #N/A 14% (83.3) 33.5 16.3 23.4 30.0 22.2 17.0 3.2 4.1 3.1 2.1 2.1 2.1 11.4 14.2 14.0 10.8 10.8 10.8 11.7 11.2 11.1 11.3 11.2 19.9 24.6 22.3 22.9 15.4 8.5 8.5 8.5 12.2 9.9 10.2 10.8 10.2 18.6 19.9 19.3 19.5 14.9 11.4 11.4 11.4 11.8 9.7 10.2 10.6 10.0 15.6 12.5 14.1 13.7 13.7 98 143 116 143 114 121 95 76 69 86 85 68 65 65 74 61 62 72 59 62 #### ##### #### #### #### ##### #### #### 11.4 10.1 10.8 10.6 10.7 10.9 10.7 10.8 10.8 10.5 11.4 8.8 10.1 9.8 10.3 9.7 7.9 8.8 8.6 8.1 #DIV/0! #DIV/0! 9.3 8.9 9.1 9.0 8.0 #### #### 9.7 7.0 8.3 8.0 7.9 14.0 18.5 14.5 19.5 14.5 19.5 ##### #### ##### #### 12 63 52 70 ##### #### ##### #### #### #### 15.6 15.6 15.6 11.8 11.8 #### 11.8 #### 6.6 6.6 6.6 4.6 4.6 4.6 0.0 0.0 0.0 #DIV/0! #DIV/0! 0.0 #DIV/0! #DIV/0! 9.4 9.3 10.6 9.8 10.0 5.5 2.9 4.2 3.8 7.2 0.4 0.4 0.4 4.3 1.6 1.6 2.5 1.7 3.8 3.3 3.5 3.5 2.7 Buy Buy Buy Neutral Buy Not Rated Neutral Not Rated
Arithmetic average Weighted average
Financials
AMP# ANZ# WBC# AMP ANZ Banking Group Westpac Banking Corporation Dec 11 Sep 12 Sep 12 5.45 27.41 26.87 6.46 27.12 29.71 18% -1% 11% 1008 6320 7412 1032 7364 8227 1220 7817 8370 961 6320 7412 1138 7364 8227 1337 7817 8370 47.7 193.4 192.3 46.8 244.9 242.2 44.7 275.6 263.8 46.1 282.6 263.6 158.9 175.2 182.8 203.7 182.8 203.7 6.7 7.6 6.2 6.2 3.9 2.0 2.8 2.6 4.9
Arithmetic average 13.2 Weighted average 14.0
Freight
FRE MFT Freightways Limited Mainfreight Jun 12 Mar 12 3.74 9.75 3.77 12.00 1% 23% 23.2 36.4 29.9 25.7 37.7 74.7 28.9 38.3 30.8 47.2 36.8 75.2 23.1 41.4 18.8 39.6 20.1 24.0 48.9 77.9 Arithmetic average Weighted average 23.6 25.6 16.2 23.5 19.9 20.8 16.0
SKC#
Gaming
Sky City
Jun 12
3.51
4.50
28%
131.4
123.0
147.6
131.4
136.3
147.6
21.9
22.8
97
90
91
84
17.3
17.0
17.0
Buy
Growth: Healthcare & Tech

FPH RAK Fisher & Paykel Healthcare Rakon Limited Mar 12 Mar 12 2.14 0.62 2.70 0.90 26% 45% 71.6 (5.4) 52.5 8.5 64.4 2.9 64.8 (1.5) 63.6 9.8 64.4 2.9 11.5 2.7 12.3 -1.0 12.0 12.2 5.0 1.5 Arithmetic average Weighted average 18.7 23.1 20.9 19.1 17.4 17.4 17.4 4.3 20.4 12.3 16.8 29.7 27.0 28.4 28.9 14.1 13.4 11.6 17.7 13.0 13.0 17.9 12.3 15.1 17.3 5.9 17.1 11.5 14.6 27.0 24.1 25.6 26.1 14.0 14.4 11.6 14.1 13.3 13.3 17.6 41.0 29.3 19.9 5.7 16.7 11.2 14.3 24.3 21.0 22.7 23.3 15.9 14.5 13.0 11.5 14.5 14.4 113 140 101 #### 109 75 107 250 16.5 16.5 16.5 26 136 25 119 36 104 34 102 10.6 13.3 12.0 12.7 14.8 14.5 14.6 14.7 11.3 9.9 12.4 11.7 11.2 11.2 17.4 18.1 17.7 17.5 7.7 12.7 10.2 11.6 15.2 13.5 14.3 14.7 11.5 12.1 12.3 11.2 12.0 12.0 13.0 13.0 13.0 7.1 12.5 9.8 11.3 16.3 15.8 16.0 16.1 13.7 11.7 13.4 11.7 12.9 12.9 14.1 14.1 14.1 8.9 8.1 8.5 8.3 11.8 12.3 12.1 11.9 11.3 9.9 12.4 11.0 11.2 11.2 14.2 10.0 12.1 13.8 6.3 7.8 7.0 7.4 12.3 11.4 11.9 12.0 11.5 12.1 12.3 10.6 12.0 12.0 10.4 10.5 10.5 10.4 5.9 7.4 6.7 7.1 13.1 13.5 13.3 13.2 13.7 11.7 13.4 11.2 12.9 12.9 12.4 0.0 12.4 0.0 12.4 0.0 5.8 5.8 5.8 15.3 14.0 11.1 43.6 11.1 43.6 8.4 0.0 8.4 8.4 12.7 11.5 12.1 11.8 5.0 4.2 4.6 4.8 7.3 7.5 7.7 2.5 7.5 7.5 3.7 0.6 2.2 3.4 0.4 1.6 1.0 1.4 1.8 2.2 2.0 1.9 0.9 0.9 1.0 3.2 0.9 0.9 Buy Buy
APN SKT
Media
APN News & Media Holding Sky Network Television
Dec 11 Jun 12
0.94 5.26
0.80 5.60
-15% 6%
119.5 100.4
-61.1 119.8
102.9 122.5
131.4 100.4
97.4 119.8
102.9 122.5
22.3 23.4
21.9 25.8
15.8 16.6 4.2 30.8 31.5 22.5 Arithmetic average 13.4 Weighted average 18.5 9.2 10.2 43.3 49.6 Arithmetic average Weighted average 28.6 30.9 29.8 29.3 10.2 12.3 9.9 21.3 10.8 10.9
2.7 2.7 2.7 3.3 2.8 3.0 3.1 7.1 7.1 8.4 2.5 7.5 7.6
Neutral (CBE) Neutral
Ports
AIA# POT Auckland International Airport Port of Tauranga Jun 12 Jun 12 2.48 10.43 2.49 10.10 0% -3% 29.7 38.0 100.8 58.4 134.8 66.5 104.6 51.8 120.9 58.0 134.8 66.5 8.7 33.7 8.3 38.6 173 187 173 157 165 147 148 128 8.2 29.0 8.7 31.0 8.7 31.0 Neutral Neutral
Property
APT KIP GMT RYM AMP NZ Office Kiwi Income Property Trust Goodman Property Trust Ryman Healthcare Jun 12 Mar 12 Mar 12 Mar 12 0.86 1.05 1.02 2.83 0.83 1.01 0.96 2.73 -3% -4% -5% -4% (152.1) 10.4 (12.4) (26.4) (7.0) 36.7 78.4 100.2 78.6 63.9 61.4 122.2 60.7 62.7 74.8 79.6 61.1 67.8 78.0 100.2 54.0 70.6 74.9 122.2 8.4 8.5 10.3 13.3 6.1 6.1 5.4 7.8 7.3 7.3 8.8 8.8 7.8 16.0 20.1 24.6 Arithmetic average (ex RYM) Weighted average (ex RYM) 62 75 60 129 82 78 67 103 86 88 70 86 97 88 79 70 6.1 7.5 8.5 6.1 5.5 7.0 7.7 7.2 5.5 7.0 7.7 7.2 Neutral (CBE) Neutral (CBE) Neutral (CBE) Neutral
New Zealand - Earnings, Dividend & Valuation Sheet

NZX Code Company/ Sector Y/E Price 1-Feb $ 12 Mth Price Target $ 12 Mth Price Upside $ Reported Net Profit 2010 2011 2012e $m $m $m Rep. Net Profit Excl-Abnormals 2010 2011 2012e $m $m $m Normalised EPS (adj for full tax,gwill amort, abs) 2009 2010 2011 2012e c c c c Price Earnings P/E Relative EV/EBIT EV/EBITDA Dividend Ratio (norm.) (inc.Indus, ex.Fin & Prop) Cash DPU 2009 2010 2011 2012e 2009 2010 2011 2012e 2010 2011 2012e 2010 2011 2012e 2010 2011 2012e x x x x % % % % x x x x x x c c c Cash Div Yield 2011 % Gross Div Yield 2011 % Price to Book 2010
Source: UBS
Rating
Resources
NZO PRC New Zealand Oil and Gas Limited Pike River Coal Jun 12 #N/A 0.72 0.88 0.85 #N/A 18% (3.3) (72.6) 22.0 7.1 37.2 42.5 11.3 1.8 9.5 10.8 6.4 6.4 6.4 20.0 9.1 11.1 13.4 13.0 39.3 39.3 39.3 13.3 5.4 11.3 10.0 11.2 7.6 7.6 7.6 11.5 10.6 12.4 11.5 12.0 17.4 12.6 15.0 16.1 20.6 17.9 14.4 17.7 17.9 6.7 6.7 6.7 10.1 18.4 13.4 14.0 13.1 121 55 67 78 32 66 70 65 75 62 112 82 39 229 46 41 ##### #### ##### #### #### #### 7.7 8.9 10.2 8.9 9.5 9.1 9.1 9.1 7.7 13.7 10.7 10.7 10.2 11.0 8.7 9.9 10.4 17.2 13.6 11.0 13.9 14.2 3.2 3.2 3.2 7.3 11.8 10.0 9.7 9.5 11.1 9.0 10.1 10.5 14.1 12.1 11.0 12.4 12.6 11.1 11.1 11.1 6.2 7.3 7.7 7.0 7.3 6.7 5.1 5.9 6.2 11.4 11.2 7.7 10.1 10.1 5.4 5.4 5.4 6.1 10.0 8.0 8.0 7.7 4.1 4.9 4.5 4.3 11.2 11.1 8.1 10.1 10.2 2.3 2.3 2.3 5.7 8.2 7.3 7.1 7.0 4.4 5.2 4.8 4.7 9.4 9.9 8.1 9.1 9.1 4.0 9.5 30.5 4.5 3.0 22.0 4.5 3.0 22.0 5.0 2.0 2.0 6.9 6.9 6.9 5.2 3.8 7.3 8.8 8.9 11.1 8.3 9.7 10.3 5.2 5.5 5.3 5.3 5.3 4.0 4.0 4.0 7.4 5.2 10.4 7.7 9.2 12.9 12.2 12.5 12.7 6.8 7.9 7.7 7.5 7.4 0.6 0.6 0.6 2.1 1.7 3.1 2.3 2.7 5.8 3.4 4.6 5.2 1.1 1.6 1.3 1.3 1.3 Buy Buy Suspended Buy Not Rated Arithmetic average Weighted average
Retail
MHI PPL WHS Michael Hill International Pumpkin Patch The Warehouse Group Jun 12 Jul 12 Jul 12 0.87 0.80 3.03 1.00 0.88 #N/A 15% 10% 29.4 25.4 60.2 34.7 (1.9) 77.8 38.8 (1.3) 80.2 25.0 24.6 83.4 29.0 12.6 76.3 32.8 7.3 70.2 4.3 8.8 27.4 6.5 14.7 26.8 7.6 8.6 7.6 4.4 24.5 22.6 Arithmetic average Weighted average
Telecommunications
TEL# TLS# Telecom Corporation of New Zealand Ltd Jun 12 Telstra Corporation Limited Jun 12 2.16 4.25 1.85 4.00 -14% -6% 17.0 4,873 70.0 4,215 275.1 4,612 17.0 4,873 238.0 4,215 275.1 4,612 2.5 40.2 0.9 39.2 12.4 14.3 33.9 37.1 10.6 Arithmetic average 10.6 Weighted average 10.6 23.3 27.1 39.3 45.0 18.3 19.8 Arithmetic average Weighted average 17.7 16.1 13.4 15.7 15.9 10.9 10.9 10.9 18.6 18.4 13.7 16.9 17.0 15.1 ##### #### 11.5 64 63 13.3 14.1 17.7 15.7 13.4 15.6 15.8 107 97 81 108 107 80 106 76 92 70 8.6 8.6 8.6 17.9 13.6 10.2 13.9 14.2 24.0 35.1 20.0 36.5 20.0 36.5 Neutral Buy
Utilities
CEN# TPW VCT Contact Energy TrustPower Limited Vector Limited Jun 12 Mar 12 Jun 12 4.80 7.05 2.65 5.69 7.40 2.40 19% 5% -9% 154.7 119.4 193.5 150.3 112.4 201.4 183.3 129.4 182.3 156.3 120.6 192.2 162.1 123.9 182.7 194.3 141.4 197.3 27.1 43.8 19.8 25.8 38.2 19.3 125 109 88 108 95 81 25.0 38.0 14.0 23.0 39.0 14.3 23.0 39.0 14.3 Buy Neutral Neutral
Total Averages
2009 %
EPS Growth (normalised) 2010 2011e % % -2.7% -3.1% -0.9% -1.5% 0.3% -0.4% 3.1% 3.7% 3.5% 4.4% 3.7% 4.6%
2012e % 6.2% 6.6% 4.9% 6.0% 4.7% 5.8%
2009 x 14.5 16.5 14.2 16.2 14.2 16.0
Price Earnings Ratio (norm.) 2010 2011e x x 15.7 17.2 15.2 16.6 15.0 16.3 14.6 16.4 14.2 15.9 14.1 15.6
EV/EBITDA 2012e x 14.6 15.1 14.2 14.8 14.1 14.5 2009 x 8.7 8.6 9.1 8.9 9.1 8.9 2010 x 8.4 8.8 8.8 9.0 8.8 9.0 2011e 2012e x x 8.2 8.4 8.7 8.8 8.7 8.7 7.4 7.9 8.1 8.4 8.1 8.3 2009 % 6.4 6.0 6.3 6.0 6.3 5.9
Cash Dividend DY Yield Gross 2010 2011e 2012e 2011e % % % % 6.0 5.8 6.0 5.8 6.1 5.8 6.2 6.2 6.1 6.1 6.2 6.2 5.8 5.6 5.8 5.6 5.9 5.7 7.7 8.1 7.6 7.9 7.8 8.0
Notes: Values in NZD Restricted stocks are excluded from forecast analysis Arithmetic averages are calculated as the sample mean, excluding outliers. Weighted averages are calculated from aggregate sample figures, e.g. P/E = (market cap))/ (net profit). Relative P/Es are calculated relative to the NZX50 Weighted P/Es, excluding Finance & Property. # Indicates inclusion in the MSCI Index. * Indicates inclusion in the NZX50 Index.
All NZX Covered Industrials

Arithmetic Average Weighted Average 0.4% 7.2% 0.8% 6.0% -0.1% 4.9%
All NZX50 Covered Stocks

Arithmetic Average Weighted Average
Summary statistics notes: Sample filters are tested each year. Stocks are excluded if the related test statistic range cirteria is not satisfied Summary statistic ranges: EPS Growth -25% to +50% EV/EBITDA 0 To 20 PE 0% to 50% Div Yld 0% to 15%
All NZX Covered Stocks

Arithmetic Average Weighted Average
Key Definitions
(CBE) Core Banding Exception - Exception to the standard rating band for these companies. (UR) Under Review - Stocks may be flagged as UR by the analyst, indicating that the stock's price target and /or rating are subject to possible change in the near term. NOTICE:
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UBS Investment Research: Global Equity Rating Allocations UBS 12-Month Rating Buy Neutral Sell Rating Category Buy Hold/Neutral Sell Coverage[1] 57% 37% 7% IB Services[2] 36% 35% 17%
UBS Short-Term Rating Rating Category Buy Buy Sell Sell
Coverage[3] less than 1% less than 1%
IB Services[4] 0% 12%
1:Percentage of companies under coverage globally within the 12-month rating category. 2:Percentage of companies within the 12-month rating category for which investment banking (IB) services were provided within the past 12 months. 3:Percentage of companies under coverage globally within the Short-Term rating category. 4:Percentage of companies within the Short-Term rating category for which investment banking (IB) services were provided within the past 12 months. Source: UBS. Rating allocations are as of 31 December 2011. UBS Investment Research: Global Equity Rating Definitions UBS 12-Month Rating Buy Neutral Sell Definition FSR is > 6% above the MRA. FSR is between -6% and 6% of the MRA. FSR is > 6% below the MRA.
UBS Short-Term Rating Definition Buy: Stock price expected to rise within three months from Buy the time the rating was assigned because of a specific catalyst or event. Sell: Stock price expected to fall within three months from Sell the time the rating was assigned because of a specific catalyst or event. KEY DEFINITIONS Forecast Stock Return (FSR) is defined as expected percentage price appreciation plus gross dividend yield over the next 12 months. Market Return Assumption (MRA) is defined as the one-year local market interest rate plus 5% (a proxy for, and not a forecast of, the equity risk premium). Under Review (UR) Stocks may be flagged as UR by the analyst, indicating that the stock's price target and/or rating are subject to possible change in the near term, usually in response to an event that may affect the investment case or valuation. Short-Term Ratings reflect the expected near-term (up to three months) performance of the stock and do not reflect any change in the fundamental view or investment case. Equity Price Targets have an investment horizon of 12 months. EXCEPTIONS AND SPECIAL CASES UK and European Investment Fund ratings and definitions are: Buy: Positive on factors such as structure, management, performance record, discount; Neutral: Neutral on factors such as structure, management, performance record, discount; Sell: Negative on factors such as structure, management, performance record, discount. Core Banding Exceptions (CBE): Exceptions to the standard +/-6% bands may be granted by the Investment Review Committee (IRC). Factors considered by the IRC include the stock's volatility and the credit spread of the respective company's debt. As a result, stocks
UBS
deemed to be very high or low risk may be subject to higher or lower bands as they relate to the rating. When such exceptions apply, they will be identified in the Company Disclosures table in the relevant research piece. Company Disclosures Company Name Ansell Limited Boral Limited
13
Reuters ANN.AX BLD.AX

5, 19
12-month rating Short-term rating Sell Buy Neutral (CBE) Neutral Neutral Neutral Not Rated Restricted Buy Neutral Buy Buy N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Price A$14.87 A$4.04 A$12.73 A$1.54 A$0.53 A$23.43 A$1.33 A$0.62 A$1.84 A$11.46 A$0.78 A$34.21
Price date 31 Jan 2012 31 Jan 2012 31 Jan 2012 31 Jan 2012 31 Jan 2012 31 Jan 2012 31 Jan 2012 31 Jan 2012 31 Jan 2012 31 Jan 2012 31 Jan 2012 31 Jan 2012
2, 3c, 4, 5, 13
Caltex Australia Limited
CTX.AX ERA.AX GFF.AX LEI.AX LYC.AX PBG.AX PDN.AX QBE.AX TAP.AX

2, 4, 6, 16
Energy Resources of Australia 16 Limited Goodman Fielder Limited

13, 16 2, 4, 5, 13 13, 16
Leighton Holdings Limited Lynas Corporation Limited Pacific Brands Ltd

3a, 3b, 4
Paladin Energy Limited QBE Insurance Group Tap Oil Limited

4, 13
2, 4, 5, 13, 16
16, 18
Woodside Petroleum Limited
WPL.AX
Source: UBS. All prices as of local market close. Ratings in this table are the most current published ratings prior to this report. They may be more recent than the stock pricing date 2. 3a. 3b. 3c. 4. 5. 6. 13. 16. 18. 19. UBS AG, its affiliates or subsidiaries has acted as manager/co-manager in the underwriting or placement of securities of this company/entity or one of its affiliates within the past 12 months. UBS AG, Australia Branch is acting as Broker to Pacific Brands Ltd on their on-market share buy-back and will be receiving a fee for acting in this capacity. UBS AG, Australia Branch is acting as Financial Adviser to Pacific Brands Limited may receive a fee for acting in this capacity. UBS AG, Australia Branch is acting as sole financial adviser to Boral Limited on the US$135 million sale of its Indonesian construction materials operations to Siam Cement Group (SCG)and will be receiving a fee for acting in this capacity. Within the past 12 months, UBS AG, its affiliates or subsidiaries has received compensation for investment banking services from this company/entity. UBS AG, Australia Branch or an affiliate expect to receive or intend to seek compensation for investment banking services from this company/entity within the next three months. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and investment banking services are being, or have been, provided. UBS AG, its affiliates or subsidiaries beneficially owned 1% or more of a class of this company`s common equity securities as of last month`s end (or the prior month`s end if this report is dated less than 10 days after the most recent month`s end). UBS Securities LLC makes a market in the securities and/or ADRs of this company. UBS Securities Australia Ltd and its related bodies corporate has a relevant interest in 5% or more of this companies issued shares. Because this company is an announced takeout candidate, UBS believes the security presents lower-than-normal risk. We have widened its rating band to +6%/-10% compared with +6%/-6%, respectively, under the normal rating system.
UBS
Global Disclaimer
This package has been prepared by UBS Securities Australia Ltd, an affiliate of UBS AG. UBS AG, its subsidiaries, branches and affiliates are referred to herein as UBS. In certain countries UBS AG is referred to as UBS SA. This report is for distribution only under such circumstances as may be permitted by applicable law. Nothing in this report constitutes a representation that any investment strategy or recommendation contained herein is suitable or appropriate to a recipients individual circumstances or otherwise constitutes a personal recommendation. It is published solely for information purposes, it does not constitute an advertisement and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments in any jurisdiction. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein, except with respect to information concerning UBS AG, its subsidiaries and affiliates, nor is it intended to be a complete statement or summary of the securities, markets or developments referred to in the report. UBS does not undertake that investors will obtain profits, nor will it share with investors any investment profits nor accept any liability for any investment losses. Investments involve risks and investors should exercise prudence in making their investment decisions. The report should not be regarded by recipients as a substitute for the exercise of their own judgement. Past performance is not necessarily a guide to future performance. The value of any investment or income may go down as well as up and you may not get back the full amount invested. Any opinions expressed in this report are subject to change without notice and may differ or be contrary to opinions expressed by other business areas or groups of UBS as a result of using different assumptions and criteria. Research will initiate, update and cease coverage solely at the discretion of UBS Investment Bank Research Management. The analysis contained herein is based on numerous assumptions. Different assumptions could result in materially different results. The analyst(s) responsible for the preparation of this report may interact with trading desk personnel, sales personnel and other constituencies for the purpose of gathering, synthesizing and interpreting market information. UBS is under no obligation to update or keep current the information contained herein. UBS relies on information barriers to control the flow of information contained in one or more areas within UBS, into other areas, units, groups or affiliates of UBS. The compensation of the analyst who prepared this report is determined exclusively by research management and senior management (not including investment banking). Analyst compensation is not based on investment banking revenues, however, compensation may relate to the revenues of UBS Investment Bank as a whole, of which investment banking, sales and trading are a part. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. Options, derivative products and futures are not suitable for all investors, and trading in these instruments is considered risky. Mortgage and asset-backed securities may involve a high degree of risk and may be highly volatile in response to fluctuations in interest rates and other market conditions. Past performance is not necessarily indicative of future results. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related instrument mentioned in this report. For investment advice, trade execution or other enquiries, clients should contact their local sales representative. Neither UBS nor any of its affiliates, nor any of UBS' or any of its affiliates, directors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of this report. For financial instruments admitted to trading on an EU regulated market: UBS AG, its affiliates or subsidiaries (excluding UBS Securities LLC and/or UBS Capital Markets LP) acts as a market maker or liquidity provider (in accordance with the interpretation of these terms in the UK) in the financial instruments of the issuer save that where the activity of liquidity provider is carried out in accordance with the definition given to it by the laws and regulations of any other EU jurisdictions, such information is separately disclosed in this research report. UBS and its affiliates and employees may have long or short positions, trade as principal and buy and sell in instruments or derivatives identified herein. Any prices stated in this report are for information purposes only and do not represent valuations for individual securities or other instruments. There is no representation that any transaction can or could have been effected at those prices and any prices do not necessarily reflect UBS's internal books and records or theoretical model-based valuations and may be based on certain assumptions. Different assumptions, by UBS or any other source, may yield substantially different results. United Kingdom and the rest of Europe: Except as otherwise specified herein, this material is communicated by UBS Limited, a subsidiary of UBS AG, to persons who are eligible counterparties or professional clients and is only available to such persons. The information contained herein does not apply to, and should not be relied upon by, retail clients. UBS Limited is authorised and regulated by the Financial Services Authority (FSA). UBS research complies with all the FSA requirements and laws concerning disclosures and these are indicated on the research where applicable. 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Where this report has been prepared by UBS Securities Japan Ltd, UBS Securities Japan Ltd is the author, publisher and distributor of the report. Australia: Distributed by UBS AG (Holder of Australian Financial Services License No. 231087) and UBS Securities Australia Ltd (Holder of Australian Financial Services License No. 231098) only to 'Wholesale' clients as defined by s761G of the Corporations Act 2001. New Zealand: Distributed by UBS New Zealand Ltd. An investment adviser and investment broker disclosure statement is available on request and free of charge by writing to PO Box 45, Auckland, NZ. Dubai: The research prepared and distributed by UBS AG Dubai Branch, is intended for Professional Clients only and is not for further distribution within the United Arab Emirates. Korea: Distributed in Korea by UBS Securities Pte. Ltd., Seoul Branch. This report may have been edited or contributed to from time to time by affiliates of UBS Securities Pte. Ltd., Seoul Branch. 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UBS
UBS Securities Australia Ltd

Australian Equities Research
David Wilson Cynthia Hopkins Fiona Mobbs 61 2 9324 2319 61 2 9324 3823 61 2 9324 2186 Head of Research Chief Operating Officer "The Australasian Daily" Manager
Australian Equities Sales

Gary Head Robert Vanderzeil 61 2 9324 3824 61 2 9324 2490 Co-Head of Equities Co-Head of Equities
Strategy & Quantitative

David Cassidy Dean Dusanic Paul Winter Oliver Antrobus, CFA Vyas Balasubramanian 61 2 9324 3721 61 2 9324 3785 61 2 9324 2080 61 3 9242 6467 61 2 9324 2728 Head of Strategy & Quantitative Research Strategist Quantitative Research Database Infrastructure Quantitative Research
Research Sales
George Kanaan John Spencer Michael Conway Craig Stafford, CFA Rob Taubman Craig Webb Craig Haskins Clinton Wong (Emerging Cos) Paul Barton (Emerging Cos) Michael Walsh Darren Cohen 61 2 9324 2570 61 2 9324 2390 61 2 9324 2845 61 2 9324 2277 61 2 9324 2685 61 2 9324 3290 61 2 9324 3787 61 2 9324 2770 61 2 9324 2291 61 2 9324 3579 61 2 8121 5719 Head of Australian Sales Head of Sydney Sales
Sydney
Financial Services
Jonathan Mott Chris Williams, CFA Adam Lee James Coghill Scott Olsson 61 2 9324 3864 61 2 9324 3968 61 2 9324 2998 61 2 9324 2821 61 2 9324 2820 Co-Head of Banks & Fincl Svcs Co-Head of Banks & Fincl Svcs Banks Insurance Insurance
Corporate Broking Head of Emerging Companies Sales
International Sales
Sales Trading Health Care & Pharmaceuticals

Andrew Goodsall Dan Hurren 61 2 9324 3574 61 2 9324 3575 Healthcare & Pharmaceuticals Healthcare & Pharmaceuticals David Singer Stuart Brownrigg Paul De Lange Tim Leahy (Real Estate) Rob Nash 61 2 9324 2575 61 2 9324 2956 61 2 9324 3546 61 2 9324 2950 61 2 9324 2065 Head of Sales Trading
Head of Real Estate Sales & Execution
Infrastructure & Utilities

David Leitch Han Xu Hannah Dent Eric Choi 61 2 9324 3870 61 2 9324 3726 61 2 9324 2665 61 2 9324 2356 Utilities Infrastructure & Utilities Utilities Infrastructure
International Sales Trading

Steve Parsons Rue Liu Jeremy Coe Trent Kennedy Jenna McLean 61 2 9324 2848 61 2 9324 2652 61 2 9324 2463 61 2 9324 3885 61 2 8121 5737 Head of International Sales Trading
Materials
David Leitch Hannah Dent 61 2 9324 3870 61 2 9324 2665 Building Materials Building Materials
Facilitation Media & Telecommuncations

Richard Eary Lauren Moran Eric Choi Lance Reynolds 61 2 9324 2869 61 2 9324 2833 61 2 9324 2356 64 9 913 4819 Head of Media & Telecommunications Media Media & Telecommunications Telecommunications Frik Kriek, CFA Jason Dick Chris Gardener Rory Lucas 61 2 9324 2130 61 2 9324 2511 61 2 9324 2842 61 2 9324 3608
Gaming & Contractors

Sam Theodore Rohan Sundram, CFA 61 2 9324 2503 61 2 9324 3708 Head of Gaming & Contractors Gaming & Contractors
Portfolio Trading
James Chen Steven Hammerton Matt Junee 61 2 9324 3748 61 2 9324 2819 61 2 9324 2818
Retailing, Food & Beverage

Lindy Newton Ben Gilbert Paul Wong 61 2 9324 2172 61 2 9324 2782 61 2 9324 3493 Food & Beverage Retail Retail
Direct Execution
David Ryan Goutham Bharadwaj Jim Groves 61 2 9324 3501 61 2 9324 2097 612 9324 2817 Head of Direct Execution
Transport, Chemicals and Paper & Packaging

Simon Mitchell Ramoun Lazar Joshua Golombick 61 2 9324 3573 61 2 9324 3156 61 2 9324 2852 Transport & Chemicals Transp, Chemicals, Paper & Packaging Transp, Chemicals, Paper & Packaging
Institutional Funds Group

Andrew Dalgleish Tim Whiteoak 61 2 9324 2857 62 2 9324 2234
Melbourne
Research Sales
Tony Rule Ian Keys Joe Mahony 61 3 9242 6443 61 3 9242 6855 61 3 9242 6446 Head of Melbourne Sales
Emerging Industrials
Lachlan Parker Martin Byers Ray David Reji Eapen 61 2 9324 3671 61 2 9324 3174 61 2 9324 2192 61 2 9324 3848 Head of Emerging Companies Emerging Companies Emerging Companies Emerging Companies
Sales Trading Real Estate

John Freedman Grant McCasker James Besson 61 2 9324 2453 61 2 9324 3626 61 2 9324 3568 Head of Real Estate & LLC Real Estate Real Estate Peter Milne 61 3 9242 6867
Wholesale Broking
Ian Keys 61 3 9242 6855 1800 060 446
Metals & Mining

Glyn Lawcock Jo Battershill Brett McKay Andrew Moller Daniel Morgan Ben Wilson Tom Price 61 2 9324 3675 61 2 9324 2834 61 2 9324 3623 61 2 9324 2156 61 2 9324 3844 61 2 9324 2392 61 2 9324 2189 Head of Metals & Mining Metals & Mining Metals & Mining Metals & Mining Metals & Mining Metals & Mining Commodities
International Equities Sales

UK/Europe
Rustam Moman Alex McGee, CFA, Andrew Dempster Sales Trading: Tim Clifford 44 20 7568 4221 44 20 7568 4254 Desk Head
Americas
Sophie Johnson, CFA David Lack, Jeremy Koch, Millie Morse Sales Trading: Steve Parsons 1 212 713 2290 1 203 719 8300 61 2 9324 2848 Desk Head
Steel
Andrew Moller 61 2 9324 2156 Steel
Energy
Gordon Ramsay Cameron Hardie 61 3 9242 6631 61 3 9242 6383 Energy Energy
Asia
Thomas Buchanan, Manuel Anton Tim Chegwin (SIN) Sales Trading: Rue Liu 852 2971 7527 65 6495 8186 61 2 9324 2652 Desk Head
New Zealand Equities Research

Wade Gardiner Lance Reynolds Stephen Jancys Tristan Joll 64 9 913 4864 64 9 913 4819 64 9 913 4890 64 9 913 4863 Hd of NZ Research, Util, Infra, Transp Strategy, Quant, Property Building Materials, Manufacturing, Retail Telcos, Media
New Zealand
Campbell Stuart, David Lane, Stephen Jancys Sales Trading: David Somervaille
Toll Free Line: 0800 244 9855 64 9 913 4807 Country Head
Economic Research
Scott Haslem George Tharenou Alvin Pontoh Robin Clements (NZ) 61 2 9324 3663 61 2 9324 3520 61 2 9324 3849 64 3 358 9150 Chief Economist Economist Economist Senior Economist
Hedge Fund Services

Thomas Anglin, CFA David Birrell Sean Satha 61 2 9324 2712 61 2 9324 3724 61 2 8121 5769 Head of Hedge Fund Sales
Derivative Sales Equity Capital Markets

Robert Vanderzeil Simon Cox Andrew Stevens Jamie Adamson Rebecca Bone Grant Wearin Richard Sleijpen Sarah Rennie 61 2 9324 2490 61 2 9324 2442 61 3 9242 6440 61 2 9324 3625 61 2 9324 3654 61 2 9324 2347 61 2 9324 2979 61 2 9324 2538 Head of Global Capital Markets Co-Head of Equity Capital Markets Co-Head of Equity Capital Markets Andrew Fitter Stuart Trueman Stephanie Pow Edward Burns Peter Mermelas Michaela Bryan 61 2 9324 2488 61 2 8121 5760 61 2 8121 5763 61 2 9324 3329 61 2 8121 5748 61 2 9324 2630
Equity Trading & Derivatives

Steve Boxall 61 2 9324 2138 Head of Equity Deriv Trading

UBS - Thur (1)

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Global Equity Research

UBS Investment Research

The Australasian Daily

Thursday, 02 February 2012

The Australasian Daily Thursday, 02 February 2012

Tap Oil Ltd, TAP.AX Dec Qtr: Tallaganda drilling in Feb

The Australasian Daily Summary 01 February 2012

Upcoming Company Information

Lisa Hacking............................. +61-2-9324 3511 Assistant lisa.hacking@ubs.com

What to look for during reporting season

The Australasian Daily Summary 01 February 2012

Sells Indonesian concrete

No COGS relief for ANN in FY12

The Australasian Daily Summary 01 February 2012

The Australasian Daily Summary 01 February 2012

Caltex Australia (CTX.AX)

Refiner margin update (Dec 2011)

The Australasian Daily Summary 01 February 2012

Production hinges on the weather

The Australasian Daily Summary 01 February 2012

Dec Qtr: Tallaganda drilling in Feb

Global Equity Research

9 AQP Int NPAT n/a, Div n/a

10 NCM Int $546.8m, 18.0cps

Source: UBS estimates; Company data

Reporting Season Events Calendar 1 February 2012

Source: UBS estimates; Company data

Reporting Season Events Calendar 1 February 2012

SFH Int $8.6m, 0.0cps UGL Int $71.5m, 30.0cps

27 AUB Int $10.7m, 9.5cps

28 ALL Fin $53.8m, 4.0cps

29 HGGH.L Fin $118.1m, 515.0cps

Source: UBS estimates; Company data

Statement of Risk N/A

Global Equity Research

Australian Monthly Market Wrap 1 February 2012

Australian Monthly Market Wrap 1 February 2012

General Market Overview

Domestic Economic Highlights

Australian Monthly Market Wrap 1 February 2012

Overseas Economic Highlights

Stock Specific Highlights

Australian Monthly Market Wrap 1 February 2012

Lynas Corporation Announces Upgrade & Secures Funding

Australian Monthly Market Wrap 1 February 2012

Global Equity Research

Oliver Antrobus, CFA

Vyas Balasubramanian, CFA

Australian Quantitative Strategy 1 February 2012

What to look for during reporting season

Table 1: Earnings Growth

Australian Quantitative Strategy 1 February 2012

Table 2: Analyst net estimate revisions ((up-down)/total)

What to look for

Source: UBS, IBES, Aspect Financial

Australian Quantitative Strategy 1 February 2012

Financial Statement Quality

Chart 3: High & Low Financial Statement Quality

Chart 4: High - Low Financial Statement Quality

Source: UBS, Aspect Financial

Source: UBS, Aspect Financial

Winter, et al. Quality drives outperformance 2010-10-23

Australian Quantitative Strategy 1 February 2012